A provocative new study suggests women make better corporate leaders because of their ability to make fair decisions when competing interests are at stake.
In the study, researchers from the DeGroote School of Business at McMaster University surveyed more than 600 board directors.
They found that women were perceived as not being afraid to go against traditional norms and to value opinions from a variety of stakeholders.
Survey respondents also believed women are more likely to consider the rights of others and to take a cooperative approach to decision-making. This approach translates into better performance for their companies.
The study is published online in the International Journal of Business Governance and Ethics.
“We’ve known for some time that companies that have more women on their boards have better results,” said Chris Bart, Ph.D., professor of strategic management.
“Our findings show that having women on the board is no longer just the right thing but also the smart thing to do. Companies with few female directors may actually be shortchanging their investors.”
Bart and co-author Gregory McQueen found that male directors, who made up 75 percent of the survey sample, prefer to make decisions using rules, regulations and traditional ways of doing business or getting along.
Female directors, in contrast, are less constrained by these parameters and are more prepared to rock the boat than their male counterparts.
Furthermore, researchers believe the findings reveal that women corporate directors are significantly more inclined to make decisions by taking the interests of multiple stakeholders into account in order to arrive at a fair and moral decision.
Women leaders also tend to use cooperation, collaboration and consensus-building more often — and more effectively — in order to make sound decisions.
Researchers believe that women are naturally more inquisitive than men, allowing them to see multiple potential solutions.
This is especially important at the board level where directors are compelled to act in the best interest of the corporation while taking the viewpoints of multiple stakeholders into account, said ays McQueen.
Experts say that universally, women make up approximately 9 percent of corporate board memberships despite arguments for gender equality, quotas and legislation.
Male dominance in board rooms continue despite evidence showing that female leadership has been linked to better organizational performance, higher rates of return, more effective risk management and even lower rates of bankruptcy.
Bart and McQueen believe the new evidence can help to equalize board membership. They believe inclusion of women’s higher quality decision-making ability will gives boards a method to deal with the multifaceted social issues and concerns currently confronting corporations.
How do people make decisions?
Why should boards have more female directors?
Source: McMaster University