Mini-men?
Any woman who wins a seat on the board of listed companies could
fairly be said to have succeeded in a man's world. We all know the
dismal statistics on women directors. Scarcely any country in the
world breaks the twenty percent barrier for women as a per cent of
directors in listed companies. But with so few women successfully
opening the boardroom door, you can't help wondering if it is only
the ones who are akin to men who make it, or even attempt it. That
begs the question: do these women at the top of the corporate
ladder actually differ in attitudes and values from their male
counterparts?
I attended the Women in
Boards conference in Sydney last year, and listened to a talk on
this very issue. Part of me was intellectually interested by the
results of what is apparently the first research into executive
level gender gaps and by the implications for the claims that women
bring valuable diversity to boards. Part of me, I confess, was
simply curious to hear whether the attributes of successful women
directors looked anything like mine!
Renee Adams, from the University of Queensland Business School,
gave the presentation in question, basing it on a paper she had
just written with Patricia Funk. It was called 'Beyond the Glass
Ceiling - Does Gender Matter?' She gave me permission to share her
draft work but the final version is now freely available here.
Research in Sweden
There is a teetering pile of research that shows how men and
women at large differ in their values, choices and preferences. You
have probably heard the key findings over and over. Women are more
caring, less competitive, more altruistic when the cost of altruism
is high, and they are more risk averse. Men are more concerned with
power and achievement.
Most of these comparisons, however, have been carried out with
students or lower level corporate workers. Adams wanted to focus
squarely on directors and she looked around for a sizeable, yet
manageable and representative sample. She chose Sweden: not only
was the penetration of women on its listed Boards and among CEOs
approaching 20%, but the whole of the Board population and key CEOs
numbered about 1800 people. The response rate she received was
satisfactory, with over a third of Directors responding and 30% of
CEOs.
An added twist is that Swedish law permits firms with over 25
workers to appoint worker-representatives to the board. The
research was thus able to compare those women who reached the Board
essentially via a legal route with those who had had to compete
with fellow executives for their directorships.
Exploring Values
Adams focused on values, because they "transcend particular
situations and actions and are driving forces in life."
Specifically, she used Schwartz's ten basic values (see sidebar)
which are found in all cultures and which omit no value that is
particularly meaningful to any one culture.
Researchers have shown that these ten values predict a variety
of actions that may explain differences in outcomes across men and
women, such as voting behaviour or altruistic responses in
experiments. Also, usefully, Schwartz's value survey is used across
Europe to study values in the general population including Sweden;
this let Adams compare Swedish directors' values and any
male-female differences in the boardroom against the general
population.
In addition to values, Adams also added a standard question to
explore risk preferences.
The Bottom Line
Swedish women directors are fundamentally different to their
male colleagues in their values and their risk profile. They
are:
• More universally concerned***
• More benevolent***
• More risk loving***
• Seek more stimulation**
• Less concerned with power***
• Less traditional***
• Less conforming***
• Seek less security**
*** significant at the 99% level
** significant at the 95% level
Referring to the super groups of values in the Schwartz sidebar,
it can be seen that women directors are relatively more
self-transcending and more open to change, while their male
colleagues are relatively more self-enhancing and conservative.
Implications for governance
Far from shrinking from risk, these female directors seem to
embrace it. It is aligned with their desire for stimulation and
their low need for security. These are values that are "typically"
associated with men, but here it is the women who hold them
relatively more strongly. Appointing women to boards need not mean
a reduction in risk preference (although some commentators have
recently advocated more women directors on this very premise!)
These findings also challenge the stereotype of women as too
risk averse and conservative to be effective leaders. The women who
successfully pursue governance roles appear closer to the male
stereotype on these dimensions yet they also bring a wider overall
set of values to the board table.
The self-transcendent values (universalism and benevolence) that
these women demonstrate have been found in other board research to
be associated with taking stakeholders' side if stakeholders'
interests are in conflict with shareholders'. Adams writes,
"...changes in diversity can have causal effects on corporate
outcomes."
Note that these women are the directors who made it to the
boardroom without the assistance of the Swedish
worker-representative law or of any quota system. Adams next asks:
are all women in the boardroom are the same, regardless of their
entry route?
Worker Representatives
The answer: the women's entry route does make a difference to
their relative values. As Adams says, "in all aspects, women who
have succeeded in the market for executives are different from
female workers who get into the boardroom as a result of employment
law." Perhaps unsurprisingly, given their role of representing
employees, women worker-representative directors are:
- More universal
- More benevolent
- More security oriented
- Less risk seeking by far
- Less power-seeking
- Less achievement-oriented
General population - highly educated
And what about highly educated women who aren't directors? In
the general population, these women are different to the same
grouping of men. They are slightly more traditional and
security-oriented, and slightly less concerned with stimulation
than men. Already, this demonstrates that they are also quite
different to the women directors who we have seen to value more
stimulation, more risk, less security and less tradition!
It's worth noting that each of the women's groups examined
(director, worker-representative and highly educated Swedes in
general) are all more caring and benevolent than the equivalent
men. But between the women's groups, the directors are relatively
less self-transcendent (universal, benevolent) than the other women
and noticeably keener on risk and stimulation.
Quotas
Adams suggests that the values and risk profile of the highly
educated females gives us insight into the kind of women who may
join boards through a quota system such as the one Norway
introduced in early 2008.
The larger the gender quota, the more likely it is
that women will be chosen as directors who are similar to the
population average.
The Swedish research suggests that, if appointed through quotas,
these educated women would tend to reinforce some of the male
director value preferences around tradition and security and could
also tilt the board to a greater risk aversion. The current
'on-their-own efforts' women directors by contrast do appear to be
injecting a greater degree of diversity.
Further implications
Adams draws out three further strands:
- Gender diversity is correlated with a positive impact on
corporate outcomes. The why? is still under debate. These results
show for the first time that male and female directors have
measurably different priorities. That in turn may be what leads
more gender-diverse boards to behave differently.
- Other research has shown that women's presence on Boards has
triggered improved governance in a variety of ways. Some
commentators have questioned whether this effect will be temporary,
because the women may "relax" once they have "made it". Given that
the roots of women's different behaviours and attitudes go deep,
however, the positive impact of bringing women onto boards should
in fact be long-lasting.
- Psychological research shows a positive link between ethical
behaviour and self-reported importance of altruism. Thus female
directors embrace a value that has been shown to precede ethical
decisions.
Lost in translation?
You may be wondering whether these results will translate
elsewhere in the world. Adams suggests two reasons why they may.
She points first to the fact that values differences between men
and women in the general Swedish population are similar to those
reported for other countries. Secondly, research she has done in
the US documents that the more gender-diverse boards have more
equity-based pay for directors. "This is consistent with the
Swedish finding that female directors are more risk-loving than
male directors".
What about YOU?
Might you be female director material? If you feel that you care
about a wide set of stakeholders, are unimpressed by the trappings
of power, find yourself somewhat impatient with rules and the
status quo, and are energised by variety, change and risk, you
could be the very woman for the job.
Excuse me… I'm off to tally my own values inventory against this
list!
© Professionelle Ltd 2010