Building on the resource-based view and human capital theory, this paper aims to extend the effects of gender diversity from the board level to the entire organizational level and investigates the impact of diversity and inclusion management practices on a firm’s intellectual capital performance. Conceptually, this study adopts the value-added intellectual coefficient (VAIC) construct and disentangles intellectual capital into its threefold dimensions of human capital, structural capital, and capital employed efficiency - HCE, SCE, CEE, respectively. Specifically, this study explores the effects of three categories of formalized gender diversity management practices – namely recruitment, retention, and training and development – while also considering the supporting role of governance structures and organizational infrastructures as a driver of the overall efficiency and value of intellectual capital.
This study analyzes a sample of 72 firm-year observations associated with 36 Italian companies listed on the Stoxx Italy-45 in the 2018–2019 period and runs multiple linear regression models.
Our findings indicate that a firm’s specific bundle of diversity management practices positively influences intellectual capital performance. By adopting a granular approach on both intellectual capital and diversity management, this study also sheds light on how different intellectual capital components are distinctly affected by varying diversity management practices.
This study enhances the understanding of how gender diversity management practices affect a firm’s intellectual capital, revealing the potential benefits of implementing formalized diversity and inclusion initiatives across multiple organizational levels, spreading from the boardroom to the entire organization.
1. Introduction
The contribution of women to corporate governance decision-making and the broader workplace environment has been extensively acknowledged within both the academic community and policy-making agendas (van Knippenberg et al., 2020; Kaur and Arora, 2020; Zattoni et al., 2023; Toyosaki, 2024). However, their participation in the labor force shows slow growth rates and persistent horizontal and vertical segregation (Fine et al., 2020; Ingersoll et al., 2024; Poma and Pistoresi, 2024), with only 35.5% of female managers and 36.8% of female directors (World Economic Forum, 2023). Accordingly, the management of gender diversity has become a significant focus in recent years, as it intersects with ethical, societal, legislative and business concerns (Köllen, 2021). Indeed, the business case for diversity is increasingly compelling (McGrandle, 2017; Wyatt-Nichol and Antwi-Boasiako, 2012; Cox and Blake, 1991), especially in knowledge-based economies (Abdulrahman and Amoush, 2020), suggesting that diversity at multiple levels contributes to corporate outcomes (Jones et al., 2013). According to the resource-based view (RBV), diversity in a firm’s human capital can drive competitive advantage, leading to increased profitability, productivity and innovation (Nerdrum and Erikson, 2001; Dai et al., 2019). Particularly, while prior studies have primarily focused on the impact of gender diversity within upper echelons on value creation through tangible resources, its influence on intangible resources - such as intellectual capital - has been largely overlooked (Arora and Tiwari, 2024; Nadeem et al., 2019). However, there is a growing consensus that the true value of workplace diversity stems from the integration of employees’ diverse experiences, capabilities and skills (van Knippenberg et al., 2020; Dezsö and Ross, 2012), as they enhance a firm’s knowledge base and knowledge-sharing practices and foster stronger psychosocial relationships among employees (Castaneda and Toulson, 2013). The combined effects of these attributes can play a central role in nurturing intellectual capital, which is increasingly regarded as a key source of competitive advantage in today’s knowledge-based economies (Smriti and Das, 2022). Accordingly, a growing body of research indicates that gender diversity can be a crucial driver of intellectual capital formation and performance (e.g. Giuliani and Poli, 2019; Nadeem et al., 2019; Ali et al., 2024).
As intellectual capital relies on the collective knowledge embedded in a company’s human resources, relationships and organizational routines (Kong and Thomson, 2009; Bontis, 1998), it represents one of the primary drivers for improving corporate performance and growth (Swartz and Firer, 2005; Giuliani and Poli, 2019). Thus, growing attention is emerging on how gender diversity can sustain intellectual capital (Toyosaki, 2024). Research exploring the relationship between gender diversity and intellectual capital at upper echelons illustrates that gender-diverse boards positively influence intellectual capital efficiency, as female directors’ leadership style and teamwork attitude support the adoption of policies that optimize the efficient utilization of intellectual resources (Abdulrahman and Amoush, 2020; Nadeem et al., 2019; Arora and Tiwari, 2024; Smriti and Das, 2022; Shahzad et al., 2020). Additionally, the unique way women process and perceive relational information promotes the integration of various knowledge bases, facilitates the sharing of ideas and common themes and, consequently, supports the conversion of tacit into explicit knowledge (Dai et al., 2019). Female team leaders also exhibit more democratic and participatory managerial styles and are more likely to encourage the recruitment and active involvement of female employees (Hewlett et al., 2013), which enhances the overall innovation potential.
Interestingly, however, when shifting the focus from the board to the organizational level, research remains comparatively limited (e.g. Shinohara et al., 2022), with most of the studies primarily examining team diversity, especially within top management teams, leaving a gap in understanding how diversity operates across other firm levels. Furthermore, findings are often mixed, with outcomes ranging from positive (Joo et al., 2023; Kravitz, 2003; Dai et al., 2019) to negative or non-significant (Ali et al., 2011; Joshi and Roh, 2009; Webber and Donahue, 2001). These inconsistencies are frequently explained by the persistence of social categorization leading to conflicts and hindering effective communication (Bacouel-Jentjens and Yang, 2019). Therefore, while current literature mostly concentrates on board or top management teams diversity, or broadly describes the variety of workforce composition, there is a growing need to expand the scope of diversity management research to encompass the entire organizational structure and its effects on firms’ outcomes (Ranta and Ylinen, 2023). Indeed, an emergent line of inquiry indicates that, beyond the boardroom, gender diversity at all organizational levels can meaningfully contribute to value creation. This shift in perspective also aligns with the growing recognition that diversity is not a static attribute but a dynamic process that requires the active management of inclusion at every organizational level. By expanding the focus of diversity research, both scholars and practitioners can gain a deeper and more sophisticated understanding of how gender diversity contributes to sustinable, long-term value creation. It highlights the importance of systemic integration of diversity practices across the entire organizational structure rather than isolated efforts at the top (Kaur and Arora, 2020). This more holistic approach can lead to a deeper understanding of how diversity at various levels drives both financial and social value.
In addition to extending the examination of gender diversity from a purely corporate governance perspective to the organization as a whole, this study aims to address another important gap in the literature. While prior studies have mostly adopted a focused approach to gender diversity, often conceptualizing propositions on the positive impact of diversity management (DM) practices on organizational outcomes without empirical validation (e.g. Cox and Blake, 1991), we respond to the calls for a more comprehensive approach to close the “research-practice gap” (Porcena et al., 2021, p. 2621). As highlighted by Porcena et al. (2021) and Ranta and Ylinen (2023), existing studies often overlook the variety of diversity management initiatives implemented by firms, thereby limiting our understanding of how such practices influence organizational outcomes beyond basic representation. Specifically, effectively managing gender diversity is a dual endeavor: it involves not only increasing gender representation across the workforce but also fostering an inclusive organizational climate that supports and values diverse perspectives (Köllen, 2021). To address this gap, our study encompasses the multifaceted array of diversity management initiatives that firms deploy at various levels and examines how different DM practices may affect intellectual capital.
Building on the human resource literature, we posit that effective gender diversity management can be a catalyst for enhancing a firm’s intellectual capital through multiple practices in recruitment, retention and training and development. These practices are most impactful when they are strategically aligned with organizational goals and well-integrated into the corporate core values and culture (Triana et al., 2021). In particular, recruitment is fundamental to ensure a diverse talent pool and, hence, to establish a balanced gender representation. However, simply hiring more women to increase gender representation is insufficient on its own. To build a sustainable culture of gender diversity, organizations must go beyond the hiring process and implement retention strategies that actively support and engage women throughout their careers. Furthermore, cultivating inclusivity requires a sustained commitment to developing an environment where employees feel supported. Therefore, training and development initiatives play a pivotal role by raising awareness of diversity-related biases and equipping employees with tools to build stronger intra-group relationships (Whyatt-Nichol and Antwi-Boasiako, 2012). Collectively, these practices help companies gradually transform their organizational culture, fostering behavioral shifts that embed diversity as a core component of corporate identity (Okoro and Washington, 2012). Our conceptual framework also suggests that this transformation is sustained by governance and organizational infrastructures, as they ensure that gender diversity initiatives are strategically aligned with the firm’s broader objectives and provide oversight and accountability for diversity management practices, thus unlocking a top-down commitment toward diversity (Monks, 2007).
From an empirical standpoint, our analysis is based on a sample of 72 firm-year observations of 36 Italian Stoxx Italy companies in the 2018–2019 period. Conceptually, we follow an established route in the literature using Pulic’s (2000, 2004) value-added intellectual coefficient (VAIC) and disentangle intellectual capital into its three components of human capital efficiency, structural capital efficiency and capital employed efficiency (e.g. Ginesti, 2019; Farooq and Ahmad, 2023; Bansal et al., 2024). Thus, we explore how gender DM practices, in terms of recruitment, retention, training and development, along with the governance and organizational infrastructures, influence each dimension of firms’ value creation.
This study contributes to the existing literature in several ways. First, we join the current debate on the effects of gender diversity on firms’ value creation by responding to the recent call for a broader understanding of the underlying mechanisms (Porcena, et al., 2021; Ranta and Ylinen, 2023). Particularly, we examine the range of DM practices that firms implement to support gender diversity at the organizational level. In doing so, we clarify previous inconsistent findings by suggesting that gender-related competitive advantage may not arise from diversity as a standalone strategic asset but rather from the overall set of practices implemented to favor gender diversity and inclusiveness (Yang and Konrad, 2011). Furthermore, we contribute to the conversations on the corporate aspects of diversity by illustrating how specific actions and initiatives may impact the three dimensions of intellectual capital differently.
Our research also adds to the intellectual capital literature by examining the relationship between DM practices and intellectual capital antecedents, an area that has been overlooked in previous studies (Nadeem et al., 2019). Our findings align with theoretical assumptions about the factors influencing a firm’s level of organizational diversity (Biswas et al., 2021; Gould et al., 2018). Importantly, our study confirms that women’s participation in the workforce may bring soft improvements that may not be directly captured by traditional financial performance metrics (Galbreath, 2018), thus further underscoring their significant role in driving firms’ broader value creation.
The remainder of the paper is organized as follows: Section 2 reviews the related literature and develops our hypotheses. Section 3 outlines the sample and research design. Section 4 presents the empirical results; Section 5 discusses the findings, and Section 6 presents conclusions in terms of theoretical contributions and managerial implications.
2. Theoretical background and hypothesis development
2.1 Gender diversity and firms’ value creation
Value creation is the process by which a firm transforms its tangible and intangible resources into economic benefits (Bowman and Ambrosini, 2007). In the current dynamic business environment, value creation is increasingly driven by innovation, efficiency and the ability to leverage intangible assets such as intellectual capital to sustain long-term growth and meet the evolving market demands. Within this scenario, there is a growing recognition that value creation is shaped by the diversity of perspectives and experiences within an organization (e.g. Fang et al., 2018; Groening, 2019; Shinohara et al., 2022).
However, previous studies on the relationship between diversity and firms’ outcomes have yielded mixed results, probably reflecting the complexity of the diversity–performance linkage (Hazaea et al., 2023; Loy and Rupertus, 2022; Teodósio et al., 2021). These inconsistent findings can be traced to the dual effects of diversity – both at the board level and within the broader employee base – on organizational processes and performance outcomes. On the one hand, diversity is a powerful tool for improving decision-making and problem-solving, as it introduces a broader array of perspectives and cognitive resources into the decision-making process (Joshi and Roh, 2009; Ely and Thomas, 2001; Webber and Donahue, 2001). On the other hand, diversity may also have negative social implications, fostering social categorization and in-group bias, ultimately undermining the effectiveness of groups' heterogeneity (Joshi and Roh, 2009; Ely and Thomas, 2001; Webber and Donahue, 2001). From a theoretical standpoint, the former effect is rooted in a cognitive perspective, while the latter derives from social categorization.
The cognitive resource diversity theory (Hambrick et al., 1996) posits that diverse experiences and backgrounds create a unique and broad set of knowledge and skills that enhance decision-making and problem-solving, nurturing the ability to handle novel situations and to evaluate non-obvious alternatives (Mateos de Cabo et al., 2012; Cox and Blake, 1991), and promoting creative and innovative solutions along with enhanced decision quality (van Knippenberg et al., 2020). Diverse teams are, therefore, better equipped to challenge conventional wisdom, leading to breakthrough ideas and more robust decision-making processes not severely constrained by groupthink.
Simultaneously, social categorization effects (Joshi and Roh, 2009; Ely and Thomas, 2001; Webber and Donahue, 2001) can dilute these potential benefits. According to the similarity–attraction paradigm (Byrne et al., 1966; Tsui et al., 2002), individuals tend to feel more comfortable with and better relate to similar individuals in terms of background, values, or attitudes. This natural inclination toward homogeneity may lead to social categorization in diverse groups, where members begin to identify more strongly with those who share common traits and, in turn, marginalize those who differ. While this situation can create greater cohesion and reduce relational friction within homogeneous groups (Webber and Donahue, 2001), such segmentation can undermine the ability of diverse groups to function effectively and erode the intended benefits of diversity (Shinohara et al., 2022).
In this study, we propose that the contradictory findings, and their underlying theoretical motivations, may be reconciled by adopting a nuanced perspective theoretically grounded in the RBV. The RBV suggests that a firm’s competitive advantage depends on unique, rare, valuable and inimitable resources (Barney, 1991). Within this framework, a company’s human capital and diversity are critical strategic resources for creating and sustaining long-term value creation (Kong and Thomson, 2009; Reed et al., 2006; Hitt et al., 2001; Hoobler et al., 2018). The unique combination of diverse skills and competencies generates firm-specific resources that are difficult to replicate, as they arise from causally ambiguous, path-dependent and socially complex organizational processes (Kong and Thomson, 2009; Reed et al., 2006; Barney, 1991). Consistent with RBV predictions, we argue that the positive impact of diversity does not solely come from diversity representation per se but from leveraging the synergies that diversity brings (van Knippenberg et al., 2020; Ely and Thomas, 2001; Maji and Saha, 2024). In this scenario, DM is a crucial tool for extracting value from diversity, laying the foundation for turning human resources into human capital (Abhayawansa and Abeysekera, 2008). DM facilitates the development of inimitable and non-tradable attributes, namely asset specificity, social complexity and causal ambiguity, which ultimately support the sustainability of a firm’s competitive advantage (Coff, 1997). Accordingly, a well-developed DM framework may enhance organizational effectiveness by promoting the appointment of diverse board members and the recruitment of diverse human resources, while reducing discrimination and fostering positive work relationships (Köllen, 2021; Cox and Blake, 1991).
2.2 Gender diversity management and intellectual capital
Aligned with RBV predictions, several studies indicate that gender diversity nurtures a firm’s overall intellectual capital (Shahzad et al., 2020), as it provides intangible and socially complex resources (Nadeem et al., 2019; Ali et al., 2011; Swartz and Firer, 2005). Gender diversity enhances firms’ intellectual capital by fostering the knowledge base, promoting knowledge sharing and better psychosocial relationships while also leveraging the efficient exploitation of intellectual resources (Smriti and Das, 2022; Nadeem et al., 2019; van Knippenberg et al., 2020). Indeed, owing to the differing psychological perspectives and experiences of males and females (Ely and Thomas, 2001), gender diversity brings unique viewpoints that contribute to improving decision-making (Ruiz-Jiménez et al., 2016; Mateos de Cabo et al., 2012; Ali et al., 2011) and enhancing creativity and innovation (Dai et al., 2019; Joo et al., 2023). For instance, Shahzad et al. (2020) provide evidence that intellectual capital efficiency reinforces the positive association between companies’ board gender diversity and financial performance, as female directors’ distinctive attributes in terms of leadership style and teamwork attitude (Abdulrahman and Amoush, 2020) help consolidating the competitive advantages stemming from accumulated intellectual capital.
Furthermore, prior studies indicate that women traits support cooperation and participation, fostering an ongoing dialogue with both internal and external stakeholders (Joo et al., 2023; Galbreath, 2018; Kravitz, 2003) and creating a cooperative working environment, with positive implications for the firm’s intellectual capital (Nadeem et al., 2019). In this respect, studies focusing on top and middle management gender diversity highlight that the peculiar way in which women process and perceive relational information favors the integration of employees’ knowledge, facilitate the identification of shared ideas and common themes, and therefore the conversion of tacit knowledge into explicit knowledge (Dai et al., 2019). Also, female team leaders show more democratic and participatory managerial approaches that sustain the innovation potential of gender-diverse workforces through fostering female employees’ presence and participation (Hewlett et al., 2013). Finally, several existing studies demonstrate that gender DM reduces costs related to absenteeism and turnover and increases employees’ quality and productivity (Smith et al., 2004; Cox and Blake, 1991).
Therefore, gender diversity contributes to the “value-in-diversity” paradigm (Cox and Blake, 1991), which posits that diverse perspectives within an organization create value. When effectively managed, gender-diverse workforces may significantly enhance firms’ intellectual capital by fostering richer interpersonal interactions and attracting diverse, talented and high-achieving individuals (Ali, 2016). Such gender-diverse environments lead to less standardized workplaces, supporting more effective decision-making processes, enhancing innovation and stimulating creativity (Mateos de Cabo et al., 2012). This increased flexibility strengthens a firm’s ability to adapt to external changes, improving their responsiveness to shifts in market conditions and industry dynamics (Ruiz-Jiménez et al., 2016). Therefore, gender diverse work environments may enhance firms’ intellectual capital because of improved individuals’ interactions (Mullen and Kochan, 2000) and the attraction of diverse, talented and high achiever employees (Ali, 2016), that result in less standardized workplaces with greater decision-making process effectiveness (Nykiel, 1997), innovation, creativity (Gardenswartz and Rowe, 1998; Grosser, 2009) and higher levels of flexibility and adaptability to external environmental changes (Gardenswartz and Rowe, 1998). Based on the above, we suggest that:
There will be a positive relationship between firms’ gender diversity management and intellectual capital.
Previous studies highlight the composite and multifaceted nature of intellectual capital, encompassing different, yet coexisting dimensions (Kong and Thomson, 2009; Riahi‐Belkaoui, 2003). Recent research examining the impact of gender diversity on intellectual capital (Arora and Tiwari, 2024; Farooq and Ahmad, 2023; Smriti and Das, 2022; Ginesti, 2019; Shahzad et al., 2020) adopts Pulic’s VAIC method (2000; 2004; 2008) to measure firm’s value creation, as the product of human, structural and physical and financial capital efficiency. Human capital represents the distinctive skills, knowledge and abilities that each individual brings to an organization. While this is the most straightforward aspect of intellectual capital, it cannot function effectively in isolation (Harris, 2000). The need to link individuals with organizational knowledge leads to the second critical component of intellectual capital: structural capital. Structural capital plays a crucial role, as it establishes the systems, processes and infrastructure that enable the flow and application of knowledge throughout the organization. The human and structural capital components build intellectual capital; however, while essential for competitive advantage, they cannot generate value independently without the support of tangible assets (Pulic, 2004). Without this integration, intellectual capital may lack the means to create tangible outputs that drive long-term value. Therefore, it is crucial to also assess the efficiency with which capital is employed, i.e. how well financial and physical resources are leveraged to maximize overall value creation. According to this conceptualization, the overall value added for the firm derives from both intellectual and financial capital.
2.2.1 Human capital efficiency.
Human capital efficiency (HCE) reflects the contribution of human resources to value creation through their organizational experiences, skills and expertise (Smriti and Das, 2022). Given female employees’ distinctive cognitive and relational attributes (Swartz and Firer, 2005), we argue that gender DM can be seen as a tool to enhance HCE through practices supporting women’s participation in the workforce and their career progression. Recruitment policies promoting gender diversity in the workforce can attract talented and high-performing individuals, thus enlarging the pool of skilled female employees (Smriti and Das, 2022). Moreover, evidence suggests that retention practices promoting work–life balance and facilitating return-to-work after parental leave – such as flexible working hours, benefits and the establishment of women’s networks – can reduce absenteeism and turnover. Consequently, we suggest that recruitment and retention policies can maximize the returns on human capital investments (Roh and Kim, 2016). Furthermore, implementing training and development practices focused on the professional growth of female workers may enhance intellectual capital performance. These initiatives, including mentoring, leadership training, career advancement planning and team-building projects, not only enhance the proficiency of female employees (Roh and Kim, 2016) but also increase the proportion of women in senior positions, thus working in tandem with governance and infrastructures. A strong governance structure is fundamental to ensure that talent develops in alignment with the evolving corporate needs and strategic objectives and sustains human capital efficiency by creating a harmonious, knowledge-sharing and collaborative decision-making environment (Smriti and Das, 2022). We hence propose the following:
There will be a positive relationship between firms’ gender diversity management and human capital efficiency.
2.2.2 Structural capital efficiency.
Structural capital embodies a company’s distinctive processes, systems and infrastructures that support the development of human resources and, consequently, intellectual capital (Arora and Tiwari, 2024; Beltramino et al., 2020; Bontis, 1998). It can be seen as an organization’s knowledge repository, providing the essential support for human capital to thrive (Smriti and Das, 2022), enabling inter-organizational learning (Kong and Thomson, 2009; Reed et al., 2006) and the transformation of implicit knowledge into explicit knowledge (Santos-Rodrigues et al., 2011). Therefore, structural capital can be viewed as a collection of intangible assets that enhance organizational capabilities and skillset, including organizational know-how, informal routines, operating procedures and the culmination of various knowledge threads, ultimately leading a firm’s innovation capacity (Beltramino et al., 2020; Dai et al., 2019; Reed et al., 2006). Research indicates that gender diversity contributes to increased creativity by sensing non-obvious alternatives, improving internal resource coordination, thus enhancing innovation performance (Nadeem et al., 2019; Galbreath, 2018; Ruiz-Jiménez et al., 2016). Building on this, we argue that effective gender management practices may positively impact structural capital efficiency (SCE). Recruitment and retention practices support workforce gender diversity, and training and development initiatives may facilitate the removal of barriers to inclusiveness, thereby improving the allocation of cognitive resources, thanks to measures designed to favor minorities’ career progression and raise awareness and commitment to diversity among employees (McGrandle, 2017). Additionally, a firm’s governance systems as well as the physical and digital infrastructure directly impact structural capital, for instance by creating knowledge management systems, introducing integrated IT systems aimed at reducing operational inefficiencies and enhancing intellectual property protection. Thus, by fostering interactions, communication, cooperation and knowledge sharing (Whyatt-Nichol and Antwi-Boasiako, 2012), gender DM may thus enhance SCE and lead to more robust organizational processes. Thus, we hypothesize that:
There will be a positive relationship between firms’ gender diversity management and structural capital efficiency.
2.2.3 Capital employed efficiency.
Capital employed efficiency (CEE) refers to the extent to which a firm effectively uses its physical capital, such as assets, to enhance its overall performance (Smriti and Das, 2022). Several studies have highlighted the positive impact of gender diversity on firms’ capital efficiency, especially as a result of decisions in the boardroom. For instance, previous studies suggest that an increased representation of women on the board is linked to higher returns on assets, showcasing that gender diversity leads to a more effective use of a company’s financial and physical resources (Bennouri et al., 2018). This improved efficiency occurs when female directors take on more active roles, engaging in substantive debates, providing fresh perspectives to decision-making and providing robust oversight through their monitoring activities. Collectively, these factors contribute to improving the firm’s financial performance (Smriti and Das, 2022). Similar beneficial effects are observed in the presence of women in top management teams, as their distinct leadership styles and ability to evaluate situations from nonconventional angles enable firms to tap into more varied human and social resources, leading to a more committed and dedicated workforce (Dai et al., 2019). Additionally, scholars argue that gender-sensitive recruitment and retention practices aimed at preserving the overall status of organizational gender diversity help firms improve productivity levels, retain knowledge and reduce potential costs of rehiring (Okoro and Washington, 2012). Enhancing physical capital requires that employees at all organizational levels stay aligned with external developments and technological advancements (Zhou et al., 2018). In this context, training and development play a crucial role in bridging skill gaps, helping the workforce adapt to evolving industry demands and effectively leverage emerging technologies. As a result, firms benefit from a more skilled and versatile workforce, which boosts productivity, and enhances return on investment (Farooq and Ahmad, 2023). Gender-diverse teams across various hierarchical levels of the organizational structure may, therefore, improve CEE as they approach resource allocation more inclusively, considering a wider range of factors and outcomes. For example, female managers often emphasize long-term sustainability and team collaboration in resource planning (Devine et al., 2019), leading to a more strategic and long-term oriented use of physical capital. This balanced approach can prevent the misallocation of resources, ensuring that physical and financial capital are used efficiently to achieve sustainable organizational performance. In light of these arguments, we expect that management practices aimed at enhancing gender diversity in the workforce positively impact CEE. Hence, our fourth hypothesis follows:
There will be a positive relationship between firms’ gender diversity management and the capital employed efficiency.
3. Methodology
3.1 Sample selection
Our sample comprises 72 firm-year observations from Italian companies ranked in the Top 45 list of Stoxx Italy as of March 2020. A total of 9 observations were excluded due to incomplete data, resulting in a final data set of 36 listed firms over the period 2018–2019. We selected this timeframe because it represents a stable pre-pandemic environment before the disruptions of COVID-19. During these years, many organizations were significantly intensifying their diversity and inclusion efforts and, at the same time, intellectual capital represented a central concept in strategic management as firms acknowledged its pivotal role in driving competitive advantage. In contrast, the COVID-19 pandemic has had a profound impact on gender diversity in organizational contexts, as it altered the organizational priorities and practices and placed a disproportionate burden of responsibilities on women, ultimately impacting their career advancements and their true achievement of a work-life balance (Carli, 2020).
The selection of the Italian context as the research setting aligns with prior studies (Murgia and Poggio, 2014; Ravazzani, 2016) and provides an ideal backdrop for examining our research question. Italy’s relatively delayed adoption of gender diversity practices compared to other Western countries and its enduring masculinity-oriented cultural traits in key industries make it an intriguing context for analysis (Murgia and Poggio, 2014). Additionally, the need for further development in organizational practices to facilitate a cultural transition toward less discriminating leadership and managerial approaches adds to the appeal of Italy as a research context (Ravazzani, 2016).
Firm-level data for this study were sourced from AIDA (Analisi Informatizzata delle Aziende), the database on Italian corporations provided by Bureau Van Dijck. Data on gender DM practices and corporate governance characteristics were manually collected from companies' yearly corporate governance reports, while DM practices were derived from sustainability or integrated reports (Porcena et al., 2021).
3.2 Variables and measures
3.2.1 Dependent variable.
To measure intellectual capital performance, we built on recent corporate governance literature investigating the relationship between gender diversity and intellectual capital (Arora and Tiwari, 2024; Farooq and Ahmad, 2023; Smriti and Das, 2022; Ginesti, 2019; Nadeem et al., 2019; Shahzad et al., 2020). In line with this research, we adopt the VAIC model as our framework of analysis (Pulic, 2000, 2004). In particular, we operationalize intellectual capital as the sum of three components: human capital efficiency (HCE), measured as the ratio between the value added and total personnel cost; structural capital efficiency (SCE), captured by the ratio between the value added minus total personnel cost on the value added; and capital employed efficiency (CEE), computed as the ratio between value added and the book value of capital employed.
3.2.2 Independent variables.
Data on DM practices were collected from company’s sustainability and integrated reports, as they represent validated archival sources allowing for longitudinal analysis. Our gender DM variables were thus developed through a manual content analysis following Krippendorff’s (2018) coding guidelines. As we aim to investigate the effects of different DM practices on intellectual capital efficiency, we first identified four independent variables encompassing the different components of formal DM that reflect the firm’s underlying unitary strategy (Porcena et al., 2021). In this respect, we adopted Pitts’s (2006) categorization, distinguishing between recruitment programs, pragmatic management policies aimed at enhancing employees’ job satisfaction and retention, and programs that raise cultural awareness through training and development initiatives. Moreover, we included governance and infrastructure-related practices, reflecting the strategic importance of institutional mechanisms in systematically embedding diversity within the organization. Accordingly, we developed the following:
Recruitment, including the outreach strategies implemented to attract gender diverse employees, such as schemes, procedures and structures for recruitment and remuneration of female workers;
Retention, capturing measures to reduce absenteeism and the departure of female employees through benefits and measures to support work–life balance, care-giving, flextime and women’s networks;
Development and training (Dev_Train), referring to actions aimed at creating diversity awareness among employees and favoring the professional development of female workers, such as group dynamics management, mentoring, team-building projects, leadership training, career promotion planning;
Governance and infrastructures (Gov_Infr), encompassing corporate functions, bodies and formal procedures oriented to gender diversity, such as gender diversity managers or taskforces to manage gender-related issues.
Following the identification of our variables, search terms were selected based on the existing literature (D'Netto et al., 2014; Armstrong, 2010; Grosser and Moon, 2008), Global Reporting Initiative (GRI) standards and Italian law prescriptions (Krippendorff, 2018) and we assigned the score of 1 for each gender DM practice enacted by a given sampled company.
3.2.3 Control variables.
Based on prior literature, we incorporated several firm-level control variables related to both the workplace environment (Biswas et al., 2021; Bacouel-Jentjens and Yang, 2019) and the characteristics of female directors (Smriti and Das, 2022; Nadeem et al., 2019). In terms of workplace environment, this study accounts for two control variables. First, the workplace profile (WPP), capturing the overall representation of women in the labor force, such as the proportion of women employees, those on flextime, new female hirings and the number of women redundancies. The second variable, female managers (Fem_Man), measures the proportion of women in managerial roles (Joo et al., 2023). At the board level, four control variables were included: the proportion of female directors(Fem_Dir) on the total board size and variables related to women’s characteristics and roles. Specifically, we controlled for tenure, which measures the average years of female directors’ appointment to a firm’s board, and expertise, capturing the percentage of female directors who are chartered accountants based on research suggesting positive financial implications of board financial expertise. As for female directors’ roles, the risk committee (Risk_Comm) variable measures the percentage of women involved in the risk committee, as the committee’s gender diversity may reduce excessive risk-taking behavior and the likelihood of financial distress. Finally, we also controlled for firm size (Size), measured as the natural logarithm of total assets, financial performance, captured by the return on equity (ROE) and industry, operationalized as a dichotomous variable taking the value 0 for financial companies and 1 otherwise.
3.3 Analytical method
Consistent with the nature and characteristics of our dependent variable, we employed a multiple linear regression. Variance inflation factor (VIF) tests were conducted to address potential multicollinearity effects. The results indicate that all VIFs are well below the threshold of 5, with the highest VIF being 2.79. To further address potential endogeneity issues, all the independent variables are lagged by one year (Nerdrum and Erikson, 2001; Moore, 2001). In other words, our empirical analysis evaluates the impact of gender DM policies at time t on intellectual capital efficiency at time t + 1. Moreover, to mitigate potential issues related to heteroskedasticity, we followed a common approach by using the natural logarithm of our independent variables, including certain control variables such as total assets (Smriti and Das, 2022; Shahzad et al., 2020). The following equation presents the regression models:
3.4 Preliminary test
Our study’s conceptual framework is grounded in the widely accepted assumption that gender DM practices positively influence organizational gender diversity. While this relationship has been assumed in prior studies, empirical evidence remains limited. Therefore, we conducted a preliminary test to confirm the existence of this relationship in our sample. To this end, we manually collected data on organizational gender diversity, measuring the proportion of female employees in each firm relative to its workforce. Empirically, we conducted a regression analysis where the firm’s level of organizational gender diversity is a function of the level of gender DM practices adopted by the firm, while also incorporating the control variables used in our main models.
The findings (Table 3) validate our baseline assumption that an increased adoption of gender DM practices is associated with higher levels of gender diversity (β = 0.007, p-value < 0.01). This result is consistent with our conceptual framework and is supported by previous theoretical predictions (Köllen, 2021; Cox and Blake, 1991). Moreover, the proportion of female employees is positively influenced by the presence of women in top and middle management (β = 0.740, p-value < 0.01), indicating a positive cycle in promoting the presence and participation of female employees (Zouaghi et al., 2020; Hewlett et al., 2013). Interestingly, female directors’ presence does not impact the effectiveness of gender DM. Conversely, their tenure has a negative relationship with gender diversity (β = −0.020, p-value < 0.05), suggesting that long-tenured members are more likely to adhere to the status quo and have a lower inclination for strategic change and risk-taking.
Regression results
| Preliminary test: Gender diversity | Model 1: VAIC | Model 2: HCE | Model 3: SCE | Model 4: CEE | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Only controls | Full model | Only controls | Full model | Only controls | Full model | Only controls | Full model | Only controls | Full model | |
| Const. | 0.263 (0.191) | 2.845 (1.323)** | 3.075 (1.483)** | 3.077 (1.528)** | −0.157 (0.929) | 0.635 (0.959) | 2.639 (1.122)** | 3.170 (1.203)** | ||
| DM | 0.007 (0.003)*** | |||||||||
| Recrutiment | 0.101 (0.050)** | 0.156 (0.060)** | 0.007 (0.038) | 0.049 (0.047) | ||||||
| Retention | 0.092 (0.055)* | 0.091 (0.067) | 0.104 (0.040)** | 0.102 (0.053)* | ||||||
| Dev_Train | −0.017 (0.073) | −0.111 (0.087) | −0.070 (0.056) | 0.093 (0.068) | ||||||
| Gov_Infr | −0.136 (0.058)** | −0.086 (0.070) | −0.021 (0.047) | −0.050 (0.055) | ||||||
| WPP | 0.031 (0.029) | 0.005 (0.028) | −0.015 (0.034) | −0.038 (0.034) | 0.009 (0.022) | −0.006 (0.022) | 0.003 (0.026) | −0.016 (0.027) | ||
| Fem_Man | 0.712 (0.085)*** | 0.740 (0.081)*** | −0.063 (0.543) | 0.672 (0.584) | −0.159 (0.618) | 0.853 (0.702) | −0.071 (0.373) | −0.038) (0.429) | 0199 (0.476) | 0.498 (0.553) |
| Fem_Dir | −0.103 (0.218) | −0.199 (0.208) | 1.482 (1.371) | 2.292 (1.339)* | 1.073 (1.605) | 1.669 (1.614) | 0.883 (0.941) | 0.821 (0.989) | −0.320 (1.215) | −0.103 (1.271) |
| Tenure | −0.014 (0.008)* | −0.020 (0.008)** | −0.059 (0.050) | −0.113 (0.049)** | −0.052 (0.059) | −0.103 (0.060)* | 0.003 (0.035) | −0.005 (0.038) | 0.015 (0.045) | −0.001 (0.047) |
| Expertise | 0.032 (0.051) | 0.057 (0.049) | −0.268 (0.311) | −0.298 (0.295) | −0.443 (0.367) | −0.439 (0.358) | −0.557 (0.215)** | −0.569 (0.216)** | −0.102 (0.278) | −0.134 (0.282) |
| Risk_Comm | 0.105 (0.067) | 0.069 (0.065) | 0.007 (0.425) | 0.162 (0.408) | 0.269 (0.493) | 0.334 (0.490) | −0.079 (0.292) | −0.014 (0.296) | 0.610 (0.373) | 0.706 (0.386)* |
| Size | −0.005 (0.009) | −0.010 (0.009) | −0.107 (0.059)* | −0.143 (0.057)** | −0.119 (0.067)* | −0.145 (0.0679** | −0.029 (0.041) | −0.065 (0.043) | −0.373 (0.051)*** | −0.403 (0.053)*** |
| ROE | 7.114e-05 (9.176e-05) | 6.767e-06 (8.998e-05) | 0.000 (0.001) | 0.000 (0.001) | 0.000 (0.001) | 0.001 (0.001) | −2,061e-05 (0.000) | 0.000 (0.000) | 0.000 (0.001) | 0.000 (0.001) |
| Industry | −0.058 (0.043) | −0.034 (0.041) | 0.263 (0.277) | 0.321 (0.270) | 0.144 (0.305) | 0.207 (0.307) | 0.149 (0.193) | 0.075 (0.202) | 1.699 (0.231)*** | 1.643 (0.242)*** |
| Intercept | 0.227 (0.201) | 0.263 (0.191) | 2.476 (1.342)* | 2.845 (1.323)** | 3.082 (1.471)** | 3.077 (1.528)** | −0.156 (0.920) | 0.635 (0.959) | 2.639 (1.114)** | 3.170 (1.203)** |
| Number of observations | 72 | 72 | 70 | 70 | 72 | 72 | 68 | 68 | 72 | 72 |
| R2 | 0.66 | 0.70 | 0.19 | 0.36 | 0.13 | 0.27 | 0.18 | 0.28 | 0.84 | 0.86 |
Note(s):
*** p < 0.01; **p < 0.05; *p < 0.1; Standard errors in parentheses
4. Results
Table 1 provides the descriptive statistics for the variables under consideration. As for workforce gender diversity, both the mean (35%) and median values (38%) indicate a relatively low percentage of employed women, as evidenced by the positive skewness (0.228). Among the components of the VAIC, the dimension with the highest average performance is HCE (2.56), ranging from 0.14 to 3.98, while SCE and CEE show comparatively lower mean and median values. Turning to the independent variables, data on the sampled companies reveal low average levels of gender DM practices. These findings are consistent with prior research indicating the delay of Italian firms in implementing such initiatives, potentially reflecting the persistent segregation of female employees (Ravazzani, 2016). It is noteworthy that female employees, on average, account for 37.7% of companies’ middle and top managers, slightly higher than the figure reported by the World Economic Forum (2023). However, the positive skewness (0.381) suggests that only a few companies employ more than 40% of female managers.
Descriptive statistics
| Mean | Median | Minimum | Maximum | SD | Skewness | Kurtosis | |
|---|---|---|---|---|---|---|---|
| Gend_Div | 0.352 | 0.384 | 0.110 | 0.714 | 0.177 | 0.228 | −1.086 |
| VAIC | 4.706 | 3.519 | −5.947 | 35.005 | 5.635 | 4.032 | 19.022 |
| HCE | 3.981 | 2.559 | 0.141 | 33.757 | 5.359 | 4.545 | 21.79 |
| SCE | 0.480 | 0.609 | −6.09 | 0.970 | 0.834 | −6.96 | 52.072 |
| CEE | 0.245 | 0.206 | 0.001 | 0.901 | 0.233 | 1.233 | 0.792 |
| DM | 9.111 | 8.000 | 25.000 | 0.000 | 6.048 | 0.729 | −0.102 |
| Recruitment | 3.013 | 3 | 0 | 10 | 2.261 | 0.593 | −0.055 |
| Retention | 1.75 | 1 | 0 | 7 | 2.081 | 1.271 | 0.642 |
| Dev_Train | 1.430 | 1 | 0 | 8 | 1.710 | 1.165 | 1.387 |
| Gov_Infr | 2.916 | 3 | 0 | 7 | 1.684 | −0.028 | −0.342 |
| WPP | 11.139 | 12 | 4 | 15 | 2.994 | −0.787 | −0.258 |
| Fem_Man | 0.377 | 0.409 | 0.1 | 0.86 | 0.202 | 0.380 | −0.789 |
| Fem_Dir | 0.349 | 0.333 | 0.083 | 0.467 | 0.073 | −1.584 | 4.566 |
| Tenure | 3.764 | 3.6 | 1 | 9 | 1.804 | 0.868 | 0.621 |
| Expertise | 0.700 | 0.666 | 0 | 2 | 0.288 | 0.955 | 4.270 |
| Risk_Comm | 0.486 | 0.5 | 0 | 1 | 0.227 | −0.051 | 0.109 |
| Size | 108,267,371,786 | 11,721,288,000 | 208,883,000 | 855,647,000,000 | 223,251,343.50 | 2.645 | 5.920 |
| ROE | 55.301 | 10.99 | −181.06 | 648.93 | 159.69 | 2.882 | 6.951 |
| Industry | 0.722 | 1 | 0 | 1 | 0.451 | −0.992 | −1.015 |
Regarding the corporate governance variables, the average proportion of female directors (34.9%) aligns with the gender quotas imposed by Italian regulations. Furthermore, most women serving as directors are chartered accountants and have been appointed to the board of directors for more than three years (with a maximum duration of 9 years) and approximately half of a firm’s female board members also serve as members of the risk committee (48.6%).
The correlation matrix presented in Table 2 indicates significant correlations. The highest negative correlation is between CEE and firm size (−0.813), while the highest positive correlation is between CEE and firm industry (0.819). This evidence suggests that non-financial companies exhibit the highest invested capital efficiency.
Correlation matrix
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gend_Div | 1 | ||||||||||||||||||
| VAIC | −0.130 | 1 | |||||||||||||||||
| HCE | −0.157 | 0.975*** | 1 | ||||||||||||||||
| SCE | −0.078 | 0.774*** | 0.730*** | 1 | |||||||||||||||
| CEE | −0.293** | 0.355*** | 0.377*** | 0.185 | 1 | ||||||||||||||
| DM | 0.196* | 0.107 | 0.109 | 0.121 | −0.288** | 1 | |||||||||||||
| Recruitment | −0.181 | 0.212* | 0.253** | 0.065 | −0.045 | 0.779*** | 1 | ||||||||||||
| Retention | 0.227* | 0.148 | 0.075 | 0.209* | −0.259** | 0.818*** | 0.450*** | 1 | |||||||||||
| Dev_Train | 0.332*** | 0.043 | −0.019 | 0.011 | −0.358*** | 0.846*** | 0.534*** | 0.692*** | 1 | ||||||||||
| Gov_Infr | 0.327*** | −0.122 | −0.021 | 0.087 | −0.290** | 0.676*** | 0.355*** | 0.396*** | 0.453*** | 1 | |||||||||
| WPP | 0.028 | 0.159 | −0.019 | 0.073 | −0.059 | 0.218* | 0.083 | 0.297** | 0.161 | 0.142 | 1 | ||||||||
| Fem_Man | 0.773*** | −0.117 | −0.134 | 0.000 | −0.269** | 0.010 | −0.342*** | 0.133 | 0.195 | 0.132 | 0.120 | 1 | |||||||
| Fem_Dir | −0.013 | 0.089 | 0.031 | 0.207* | −0.224* | 0.325*** | 0.172 | 0.237** | 0.228* | 0.413*** | 0.241** | 0.036 | 1 | ||||||
| Tenure | 0.045 | −0.084 | −0.077 | 0.020 | 0.170 | 0.162 | 0.131 | 0.127 | 0.204* | 0.041 | −0.001 | 0.241** | 0.149 | 1 | |||||
| Expertise | −0.123 | −0.109 | −0.118 | −0.359*** | 0.174 | −0.182 | −0.027 | −0.119 | −0.179 | −0.287** | −0.075 | −0.205* | −0.321*** | 0.120 | 1 | ||||
| Risk_Comm | −0.115 | 0.049 | 0.072 | 0.001 | 0.049 | 0.241** | 0.305*** | 0.058 | 0.108 | 0.276** | 0.231* | −0.282** | 0.297** | 0.044 | 0.052 | 1 | |||
| Size | 0.128 | −0.319*** | −0.265** | −0.126 | −0.813*** | 0.332*** | 0.118 | 0.377*** | 0.318*** | 0.244** | 0.004 | 0.109 | 0.237** | −0.166 | −0.123 | −0.002 | 1 | ||
| ROE | −0.035 | −0.037 | −0.004 | −0.138 | 0.006 | 0.104 | 0.022 | 0.160 | 0.101 | 0.043 | 0.028 | −0.127 | −0.346*** | −0.044 | 0.237** | −0.207* | 0.001 | 1 | |
| Industry | −0.447*** | 0.250** | 0.194 | 0.102 | 0.819*** | −0.360*** | −0.107 | −0.300** | −0.427*** | −0.346*** | −0.159 | −0.403*** | −0.229* | 0.121 | 0.223* | −0.063 | −0.596*** | 0.010 | 1 |
Note(s):
***p < 0.01; **p < 0.05; *p < 0.1
Table 3 presents the regression results.
In Model 1, we tested H1 on the relationship between gender DM and intellectual capital, offering partial support. The coefficients for both recruitment and retention are positive and statistically significant (β = 0.101, p-value < 0.05; β = 0.092, p-value < 0.1). However, the variable for development and training does not exhibit a significant effect on the VAIC. Contrary to our expectations, we observe a negative relationship between the corporate governance and infrastructure variable and intellectual capital (β = −0.136, p-value < 0.05).
Further insights were gained by disentangling the intellectual capital into its components. Model 2 supports our second hypothesis regarding DM practices and HCE (β = 0.156, p-value < 0.05). However, neither retention nor development and training have a significant influence on HCE. Model 3 provides partial support for our H3 on the effect of gender DM practices on the structural capital component, as only retention demonstrates a positive and significant relationship with SCE (β = 0.156, p-value < 0.05). In Model 4, testing our hypothesis on the relationship between gender DM and physical capital efficiency, the results only reveal a positive and significant effect associated with the retention variable (β = −0.102, p-value < 0.1).
In considering our control variables, we found heterogeneous effects in our models. The proportion of female directors has a positive impact on intellectual capital (β = 2.292, p-value < 0.1), aligning with previous research indicating that board gender diversity enhances intellectual capital efficiency (Arora and Tiwari, 2024; Smriti and Das, 2022; Shahzad et al., 2020; Nadeem et al., 2019). Nonetheless, we also observed a negative impact of female directors’ tenure on intellectual capital (β = −0.11, p-value < 0.05), driven by the human capital component (β = −0.10, p-value < 0.1), highlighting that long-tenured members tend to resist change and may be less risk-taking. Results also show a negative effect of female directors’ expertise on SCE (β = −0.569, p-value < 0.05), suggesting that chartered accountants may be appointed as gatekeepers, ensuring formal compliance with laws and regulations, without significantly contributing to decision-making. In contrast, the proportion of women in risk committees positively affects the CEE (β = 0.706, p-value < 0.1), consistent with prior findings highlighting their role in mitigating risks. Additionally, firm size negatively affects intellectual capital (β = −0.143, p-value < 0.05) and both HCE (β = 0.145, p-value < 0.05) and CEE (β = −0.403, p-value < 0.01), as larger firms may face greater challenges in effectively leveraging their intellectual capital potential (Dalwai and Mohammadi, 2020).
5. Discussion
While the spotlight on firms’ gender diversity has been gaining traction, the involvement of women in the workforce and businesses' commitment to fostering a diverse climate are social topics of valuable debate among both scholars and practitioners. Though it is generally expected that having more women in the workforce yields positive outcomes (Köllen, 2021; Okoro and Washington, 2012), empirical findings have been inconsistent, emphasizing the urgent need to further explore how various firm-level specificities may influence this relationship (Dwyer et al., 2003). Our study makes a meaningful contribution to this ongoing discussion by providing insightful perspectives on how women’s presence in the workforce and intellectual capital performance are fostered by DM, as a critical factor to leverage diversity (Yang and Konrad, 2011). First, it provides evidence that the efforts to enhance not only female directors but also female employees’ participation and cooperation significantly contribute to firm-level gender diversity (Zouaghi et al., 2020). Additionally, more women in top and middle management create a self-sustaining cycle of positive influence by providing role models and increasing the overall commitment to diversity (Poma and Pistoresi, 2024). Our results indicate that practices aimed at attracting and retaining female employees contribute to improved intellectual capital performance by enriching organizational knowledge, skills and perspectives (Smriti and Das, 2022; Roh and Kim, 2016). However, corporate governance and infrastructures, encompassing companies’ bodies and formal procedures designed to reduce gender discrimination (e.g. anti-discrimination policies, gender training, etc.), hinder the development of intellectual capital, apparently contradicting our expectations. This finding is intriguing as it showcases that while gender representation is important, the mere existence of formal structures and policies may not be per se sufficient to drive meaningful improvements in intellectual capital. This also raises the need to consider individuals’ perceptions and their strategic integration within the organizational culture. Therefore, even well-structured gender diversity management practices may not automatically yield the intended positive outcomes for at least two main reasons. Individuals perceiving themselves as belonging to a minority group, such as gender minorities, may experience feelings of stereotyping and social pressures (Maass and Cadinu, 2003; Zemore et al., 2012). In such a circumstance, the intended benefits of diversity, especially in terms of intellectual capital enhancement, may not materialize as expected, or even be undermined by feelings of exclusion or bias (Smith et al., 2004; Niemann and Dovidio, 1998). Additionally, the effectiveness of corporate governance structures and formal procedures aimed at gender diversity extensively depends on how well these measures are integrated into the broader organizational identity and culture. If diversity management is not effectively integrated into the company’s core operations and values, or if it is perceived as a purely compliance exercise, then these governance structures may not significantly enhance intellectual capital (Jones et al., 2013; Yang and Konrad, 2011). As van Knippenberg et al. (2020) and Bacouel-Jentjens and Yang (2019) suggest, the full benefits of diversity on intellectual capital come when DM is strategically embedded within the organization’s culture, leading to an environment that actively fosters inclusion and innovation.
Building on this evidence, effective gender DM should be fully integrated in the organization’s strategy and culture, going beyond merely formal initiatives (Gotsis and Kortezi, 2013). This achievement may be reached by increasing the proportions of women in management teams, as they may catalyze a diversity-oriented climate. Indeed, having more women in leadership positions facilitates structural changes, as they can advocate for policies that enhance gender equality – such as flexible working arrangements, family leave policies and initiatives to reduce bias in recruitment and promotion. This observation aligns with the RBV perspective, highlighting managers’ crucial role in cultivating a firm’s distinctive and unique capabilities (DeCarolis and Deeds, 1999).
Accordingly, implementing targeted measures to increase the presence and continuity of female employees can enable firms to establish sustained competitive advantage by nurturing their capacity to leverage their intellectual capital (Smriti and Das, 2022). On the one hand, higher levels of intellectual capital efficiency can be achieved by implementing practices capable of attracting highly talented and skilled candidates. Targeted recruitment techniques enable firms to recognize and promote a substantial and valuable labor force segment (D'Netto et al., 2014), thereby enhancing corporate reputation and potentially attracting a larger pool of applicants irrespective of gender. On the other hand, retention initiatives reduce the costs related to employee turnover and absenteeism (Wang et al., 2011; Monks, 2007; Batt, 2002) and can strengthen firms’ ability to preserve accumulated organizational knowledge and relational capital (Myers and Dreachslin, 2007), maintaining the firm’s implicit and nontransferable knowledge and capabilities (Dai et al., 2019). Simultaneously, interventions aimed at enhancing workforce stability enhance firms’ efficient deployment of physical and financial capital, given the vital role played by employees’ competencies and organizational knowledge in ensuring firms’ survival and profitability. By contrast, diversity training aimed at shaping employees’ attitudes toward specific minority groups appears largely ineffective, as these attitudes are deeply emotional, resistant to change, and closely tied to individuals’ self-identity. This observation may hold particularly true in the Italian context, where the prevalence of male-dominated boardrooms and work environments and the delayed adoption of gender DM at multiple levels may impact individuals’ perceptions (Murgia and Poggio, 2014). Organizational prerequisites in terms of specific DM practices can thus play anessential role in effectively harnessing the potential benefits of workforce gender diversity. In line with the RBV, a firm’s specific array of gender DM practices can itself be a source of sustained competitive advantage, given the potential synergy resulting from the unique mix of such practices (Yang and Konrad, 2011).
In this perspective, the conceptual dissection of intellectual capital provides a layered interpretation by demonstrating that gender DM practices affect intellectual capital efficiency components differently. Human capital performance improves in companies implementing gender-related policies and measures (Okoro and Washington, 2012). Such practices diminish women’s perception of identity threat and counteract the deterrent effect associated with companies known for lacking diversity (Flory et al., 2021), while also positively impacting firms’ reputation by attracting a greater number of more skilled applicants, regardless of their gender (Ali, 2016). This effect underscores the crucial role of the human capital component in the value creation process and the overall employee life cycle. Indeed, from a life-cycle perspective, it signifies the initiation of the entire employer branding process and forms a critical phase in realizing the two axioms of person–organization and person–job fit. Importantly, a firm’s human resources’ quality heavily relies on its ability to attract and integrate candidates for employment (Abhayawansa and Abeysekera, 2008). Our study suggests that gender-inclusive recruitment benefits human capital efficiency, serving as a means to attract talented and high-performing applicants. Conversely, as structural and physical capital efficiency stem from a firm’s cumulative and distinctive capabilities (DeCarolis and Deeds, 1999), both are likely influenced by a firm’s accumulated knowledge and culture. The favorable role of organizational measures to prevent employee turnover suggests that enhancing intellectual capital can be achieved by preserving firms’ diverse capabilities and resources arising from established routines and coordinated efforts of individuals (Helfat and Peteraf, 2003).
Finally, our study sheds light on the mechanisms underlying effective gender DM, indicating that leveraging gender-diverse workforces requires gender DM to be integrated in a firm’s strategy, permeating the corporate culture at all levels and supported by senior management and governance bodies. In this context, gender-related practices should be gradually adopted according to each firm’s specificities and tailored to the various dimensions of intellectual capital, as they embody the outcomes of different organizational and human resources’ characteristics and interactions.
5.1 Implications
Several theoretical and practical implications arise from this study. From a theoretical standpoint, our results contribute to scholarly conversations on gender DM, by shedding light on the organizational effects of practices aimed at enhancing women’s presence in the workplace. First, while previous research has primarily focused on the impact of gender diversity on financial or intellectual capital performance or their interrelationship (e.g. Bansal et al., 2024; Suciati et al., 2024), this study is the first to explore how a firm’s overall gender DM practices influence intellectual capital, addressing multiple and recent calls for research in this area (Yang and Konrad, 2011; Nadeem et al., 2019; Arora and Tiwari, 2024). In doing so, we shift the focus to diversity at the organizational level as a whole, in contrast to previous studies that have primarily investigated diversity within upper echelons or teams (Porcena et al., 2021; Gotsis and Kortezi, 2013). Second, gender DM practices are not universally applicable, as their effectiveness depends on how well they align with both country- and firm-specific characteristics, as well as the particular dimensions of intellectual capital they aim to enhance. Third, our study contributes to the RBV by demonstrating that a firm’s unique bundle of DM practices may lay the foundations for sustained competitive advantage. Specifically, as the effectiveness of DM depends on their integration into the firm’s strategy and alignment with its distinctive traits (Bacouel-Jentjens and Yang, 2019; McGrandle, 2017), the set of initiatives and actions implemented by the firm can be viewed as a unique, valuable and inimitable resource in line with RBV tenets (Hoobler et al., 2018). Additionally, our study contributes to the intellectual capital literature by positioning DM practices as a key determinant of intellectual capital, a connection that has been mostly overlooked in previous research (Nadeem et al., 2019).
In terms of managerial implications, our study suggests that to maximize value creation and enhance organizational capabilities, firms should prioritize recruitment efforts that are particularly attuned to attracting female candidates. Additionally, firms should implement female-sensitive onboarding practices, such as coaching and mentoring, to support new hires. Similarly, training and development programs should focus on raising awareness of diversity issues and eradicating gender stereotypes through gender-sensitive approaches, thus promoting behavioral change and fostering greater inclusivity (McGrandle, 2017). As job seekers increasingly value firms that actively promote diversity and maintain strong community and employees’ relations, adopting such practices can also improve the firm’s ability to attract global talent, bolstering its reputation for reducing gender disparities.
Our study also offers several policy-making recommendations, recognizing that gender diversity management can have profound and far-reaching social implications. Policymakers may consider creating regulations and incentive mechanisms supporting and rewarding companies for genuinely adopting and integrating gender diversity management practices. Moreover, they could encourage public–private partnerships aimed at fostering inclusive workplace cultures and creating gender-neutral policies that promote work–life balance for all employees.
Furthermore, gender-diverse champions can also generate positive externalities by encouraging other businesses and tied-to institutions to implement similar practices, thus promoting social cohesion within communities. Policymakers might also consider establishing industry-wide benchmarks and transparency requirements for gender diversity to enhance accountability. This could involve mandatory reporting of gender diversity metrics or the establishment of diversity targets for companies receiving government contracts. It is also important to underscore the potential broader implications on women’s empowerment, as gender diversity initiatives within corporate governance and across the workplace can play a crucial role in closing the gender gap. Specifically, as more women attain leadership roles and decision-making power, these initiatives could reshape organizational cultures and challenge entrenched gender norms, both in the workplace and in broader society, challenging long-held stereotypes about women’s capabilities and roles. This could inspire more women to pursue higher education and career paths in traditionally male-dominated fields, thus narrowing gender gaps in these areas. Moreover, as companies adopt gender diversity practices, they may encourage changes in public policies, such as better parental leave, childcare support and equal pay initiatives, which would directly improve the work-life balance for women and men alike. These changes could drive a wider societal shift, where policies actively promote gender equality, not just within organizations, but in society as a whole. Additionally, these practices could help reduce discrimination and bias in hiring, promotions and educational opportunities. On a broader scale, promoting gender diversity in the workplace can foster greater social equity by dismantling the traditional barriers that have restricted women’s full participation in economic, political and social spheres (Kaur and Arora, 2020). These changes are not only ethically desirable but also contribute to a virtuous cycle: increased female participation in the labor force and in communities is linked to higher rates of economic growth (Besley et al., 2012), stimulating talent development to the benefit of both society and the economy.
6. Concluding remarks
This study takes a nuanced and integrative perspective to the examination of how various gender and inclusion management practices affect firm-level intellectual capital, thus joining the ongoing dialogue at the intersection of corporate governance and human resource literatures (Poma and Pistoresi, 2024; Toyosaki, 2024).
Our analysis does not come without limitations, that open interesting directions for future research. Firstly, our exploratory study is based on a small sample and a short observation period. Although this focused design helps minimize potential heterogeneity, future studies could develop longer-term panels to capture the dynamic evolution of gender DM practices in fostering intellectual capital development and efficiency. Particularly, as female have proven to unlock resilience potential during crises (Gómez et al., 2024), it would be interesting to extend prior studies that take a comparative approach to the examination of pre- and post-COVID effects of gender diversity (e.g. Khanchel et al., 2025) and explore whether and how the gender diversity implications on intellectual capital have been altered in the aftermath of the COVID-19 pandemic, given its negative impact on women employment and gender inequalities (Bettin et al., 2024).
Similarly, the context-specific nature of DM practices implies that country-level factors, such as culture and institutional environment, could significantly influence both gender representation and gender diversity outcomes. Future studies could adopt a comparative approach by examining how these practices operate across different national contexts.
Overall, our findings contribute to the growing debate on workplace gender diversity as a reflection of gender diversity at the corporate governance level, providing new insights into the organizational mechanisms needed to effectively leverage the benefits of a diverse workforce.
