Women’s political empowerment has been argued in terms of power, access to resources and involvement in politics (Chen, 1992; Norris & Inglehart, 2003). It can be defined as the process of increasing capacity and leading for women and participation in societal decision-making (Zhang, 2020). In countries with higher gender equality, women are more equally represented in positions of authority as they are perceived as equal to men. In this sense, they are more likely to possess a greater percentage of parliamentary seats compared to those countries in which gender equality is not perceived as an accepted practice. Thus, in contexts where gender equality is greater, firms are under stakeholders’ pressure to comply with what is accepted as appropriate and desirable based on widely societal norms and values (Zhang, 2020). This is because investors, in general, tend to peek at the normatively accepted practices from a particular environment in order to assess the firm’s engagement on board gender diversity. Henceforth, in those contexts where board gender diversity has a higher normative acceptance, investors will respond positively when a firm increases its gender diversity as they will perceive it as better managed than firms that do not (Zajac & Westphal, 2004).
Oppositely, in those contexts in which board gender diversity has not gained normative acceptance, investors might see it irrelevant as they do not expect firms to stimulate it. Accordingly, the relationship between female directors and firm performance is more positive in those countries where gender equality is higher because they are balanced societies in which women and men are perceived equally (Post & Byron, 2015). Following this statement, female directors in countries with higher gender equality are more likely to have experiences and values that allow them to make greater contributions by providing more diversity in skill or knowledge-based to boards. Thus, shaping the board processes and, ultimately, influencing the firm performance.
Recent research conducted by Zhang (2019) report the positive effects of gender diversity in societies with a high normative acceptance of women that work. The author defines normative acceptance as a widespread cultural belief that believes that gender diversity is important. In his research, he conducts a study of leading firms across 35 different countries and shows evidence of a positive relationship between gender diversity and firm performance, only in contexts where gender diversity is viewed as normatively accepted. In concrete, he finds evidence that gender diversity is a driver for these companies’ success. In this framework, institutionalized beliefs and expectations are important because they affect gender behaviours in social settings, thus being consequential for the influence companies’ female directors can have on firm performance.