INDEPENDENT WOMEN ON BOARDS OF DIRECTORS: INTRODUCING THE “SANDWICH EFFECT” CONCEPT

Abstract

This article introduces the Sandwich Effect, a new conceptual model that explains how independent women directors operate at the intersection of regulatory governance requirements and market pressures for inclusion, legitimacy and transparency. Drawing on Agency, Institutional and Resource Dependence theories, the model highlights the dual role played by independent female directors as agents of compliance and as carriers of market-signaling effects. To illustrate its relevance, the article presents an exploratory analysis of PSI‑listed companies, examining gender composition, independence, adherence to governance recommendations, and market valuation indicators. While the empirical patterns show no significant association between gender diversity and ROE, they reveal a strong positive relationship between the presence of independent women, compliance with governance best practices, and market valuation, supporting the model’s central premise that qualified diversity is valued by external stakeholders. The study offers a replicable theoretical framework that enhances understanding of how board structure, independence, and gender interact to influence governance quality and market perception.