Women on Corporate Boards of Directors

Women on Corporate Boards of Directors: International Research and Practice, edited by Susan Vinnicombe, Val Singh, Ronald J. Burke, Diana Bilimoria, and Morten Huse presents an excellent set of worldwide research on progress, strategies, results, and challenges.

Overall, progress seems to be glacial but more pronounced in European countries, such as Norway with legislated quotas.

Women’s representation appears associated with representation in senior management, smaller pay gaps, equity legislation, work-family initiatives, social/cultural support, quality of board deliberations, and increased profit. Of course, if the correlation with increased profit proves strong enough, we may see growing demand for the Pax World Women’s Equity Fund and others that promote gender equity. So far, correlations seem too weak, although several public pension funds, including CalPERS and CalSTRS may help the cause.

One of the more interesting papers in this collection is that of Val Singh, who focuses on Jordan and Tunisia. I haven’t seen much research on corporate governance in Arab countries, especially focused on women, and was surprised to learn 10% of Tunisian directors are women. It is difficult enough trying to get inside the "black box" of boardrooms anywhere. Creating benchmark studies in Arab countries must be even more difficult, given what at least appears to this outsider as a general reluctance to tackle gender issues.

Women do much better at state-run businesses. In the US, we seem to be more willing to experiment at companies that are broken, so the financial crisis may present an opportunity. However, several researchers warn of a "glass cliff." Apparently, women are invited onto more boards where companies are failing and are desperate. They are paid less at companies performing well and more at those doing poorly. Like directors elected by dissident shareowners, women directors are often isolated as outsiders and do better when they are not alone.

At the February 2009 "Women in Investments" conference in Sacramento, CalSTRS board member Carolyn Widener, drew a big laugh when she quoted Nicholas Kristof about speculation at Davos, Switzerland concerning "whether we would be in the same mess today if Lehman Brothers had been Lehman Sisters." Eventually, if resurrected, maybe we’ll have Lehman Sisters and Brothers. This volume contains some of the best research to date from a wide variety of disciplines around the world that may just help to get us there.

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