CLS Blue Sky Blog

Credentials Matter, but Only for Men: Evidence from the S&P 500

Gender diversity in the boardroom and the C-suite is one of the most contentious topics in corporate governance. Proponents of greater diversity argue that the lack of women directors and top executives is a missed opportunity and that increasing their numbers will improve corporate governance, and ultimately, increase shareholder value. Efforts toward that goal have included State Street’s “Fearless Girl” campaign, California’s two board-diversity statutes, and the recently approved NASDAQ rule. Many opponents of these measures stress that they don’t oppose diversity per se, but argue that there is a shortage of qualified women. As a result, they say, mandating greater numbers of women at the highest levels of corporate America could cause companies to promote women who lack the qualifications that the company most needs, thereby harming shareholders in the long run.[1]

In a recent article, we shed light on this problem by studying the careers of women and men who have already become executives or independent directors of some of the largest U.S. companies. Among these individuals, we study the extent to which one particularly high-profile credential – experience as an executive or independent director of an S&P 500 company – leads to more future positions at other S&P 500 companies.

We find that, while men with experience at S&P 500 firms are significantly more likely to obtain additional positions at other S&P 500 firms in the future, women are not. For men, experience at an S&P 500 firm is associated with 0.006 more future independent directorships and 0.005 more executive positions at other S&P 500 firms per year over the course of the next 10 years, representing a 12 percent and 42 percent increase relative to the average, respectively. Both these increases are completely absent for women.

Our empirical strategy captures the effect of S&P 500 credentials on future career paths as long as there are no firm-specific, time-varying, and unobservable factors correlated with the decision to add a company to the S&P 500 index that affect women and men differently. First, we exploit the details of the S&P 500’s construction as a source of variation in this credential. Second, we use firm-fixed effects to focus on within-firm changes in S&P 500 status. Third, to further reduce concerns about omitted variables, we restrict attention to instances where the manager was already associated with the firm when it was added to the index. Fourth, because our key coefficient of interest is the difference between men and women in the relationship between S&P 500 credentials and future positions, even firm-specific, time-varying, and unobservable factors not captured in the previous steps would pose a challenge to our identification strategy only if they had a different effect on men and women managers who were at the same firm at the same time.

We extend our baseline analysis in three ways. First, we ask whether the value of the S&P 500 credential extends across industries. We find that it does not: The new positions that managers obtain are in the industry (or industries) in which they have previously worked. Next, we examine its relationship with other signals used in hiring. We focus on personal connections and find that S&P 500 experience and connections tend to be substitutes rather than complements. Finally, we look at how quickly the effects of S&P 500 experience materialize by varying the time period under study and find that the effects appear within the first 10 years of obtaining the experience.

One potential explanation for why we observe no increase in subsequent positions for women is saturation: If firms are desperate to find women for executive and board positions, the S&P 500 credential might have no value for women because all the women who satisfy the minimum criteria are already highly sought after. Under this interpretation, the credential does not matter for women because even women who do not have it are selected as managers of S&P 500 firms.

Two pieces of circumstantial evidence suggest that this is unlikely to be the primary explanation for our results. First, while qualified women have been in high demand in recent years, they probably were not early in our sample. We therefore look for evidence that the interaction between S&P 500 experience and gender has changed over time. We find no consistent evidence that it has. Second, because managers tend to stay in the same industry, qualified women may be in especially short supply in industries where women make up a smaller percentage of the workforce. Hence, if saturation were driving our results, we would expect the interaction between S&P 500 experience and gender to vary systematically across industries with the percentage of women in the labor force. We find no such cross-sectional pattern.

Our results relate to several literatures. A large literature examines the labor market for independent directors, including the value of career histories and reputation in this market. A separate literature shows that, in a number of contexts, women receive less credit for similar work than men. We bring together and extend these two streams of literature by showing that S&P 500 experience predicts future executive positions and board seats at S&P 500 firms for men, but not for women. We interpret this as evidence that women receive less credit for having S&P 500 experience.

Our findings also advance the literature on female underrepresentation on corporate boards and among top executives. If the pool of female candidates with adequate experience is indeed limited, our findings suggest that even experienced women may not always be selected for executive and board roles. The differential assessment of credentials may cause the pool of qualified women to appear even smaller.

Finally, our results have implications for the understanding of how firms recruit executives and directors and of the role that experience at large public firms plays in their choice. The evidence indicates that experience at an S&P 500 firm opens the door to future executive and non-executive positions at other S&P 500 firms for men, but not for women. Combined with existing evidence of “pipeline problems” for women in top positions, the differential evaluation of work experience that we document represents a further obstacle to increasing the representation of women on corporate boards and among top executives.


[1] See, e.g., Hester M. Peirce, Statement on the Commission’s Order Approving Proposed Rule Changes, as Modified by Amendments No. 1, to Adopt Listing Rules Related to Board Diversity submitted by the Nasdaq Stock Market LLC (Aug. 6, 2021),

This post comes to us from professors Peter Cziraki and Adriana Robertson at the University of Toronto. It is based on their recent article, “Credentials Matter, but Only for Men: Evidence from the S&P 500,” available here.

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