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Running Head: IMPACTS OF WOMEN ON BOARDS OF DIRECTORS
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IMPACTS OF WOMEN ON BOARDS OF DIRECTORS
The main aim of a company is to increase its Corporate Social Ratings (CSR) which in turn improves image and reputation. The company’s reputation also depend on institutional (positive actions towards the community like voluntary work, charities and promotion of women) and technical strengths (positive actions towards the consumer such as transparency, social benefits, health and safety programs). A lot of research has been conducted on the impact of women on boards of directors and they all come to a conclusion that women play a significant role on the growth of a company.
Research Issue:
Impacts of Women on Boards of Directors
Literature Review:
In recent times, there has been an increase of women representation on managerial positions in many firms and companies which can be attributed to the gender and minority campaigns in the society and the concept of gender equality. As a result, more women have been educated, hired, promoted and appointed in boards of directors. Women bring variety and different perspectives in decision making to the board. They are also more likely to sustain specialists and society than their male counterparts, (Hillman, Cannella & Harris, 2002). This is because women have gained more experience in other fields outside business and have different educational backgrounds from men.
Methodology:
Data for this research will be drawn from Fortune 2009 list of World’s Most Admired Companies which contains financial performance ratings; this will be the dependent variables. I will also include mediator variables which will be the Corporate Social Ratings. This data will be obtained from KLD database where ratings are based on strengths, corporate governance, product, environment, employee relations anddiversity. Independent variables are diversity of director resources and the women representative in form of numbers on the board. Director diversity of resources will describe experience professional background and network connections of board members. Number of women will be a count of females on board of directors.
In the analysis I will first compare the relationship between the director resource diversity and number of women representatives on the boards with Corporate Social Ratings. I will then look at the relationship between Independent variables and dependent variables. Then the relationship between mediator variables and dependent variables will be obtained.
Preliminary Research Findings:
The company’s board diversity is consistent as to the number of resources present in the board. Corporate Social Ratings have a positive effect on the reputation of the company. Also diversity of board resources and the number of females on the board will influence corporate Social Ratings positively.
Potential implications:
The number of women on the board brings about increased sensitivity to Corporate Social Ratings, (Williams, 2003) and also participative decision making, (Konrad et al., 2008). Robinson and Dechant (1997) argue that presence of women on boards of directors increases the ability of a firm to compete for women bring better understanding of the market by diversifying consumer base. Nowell and Tinkler (1994) suggest that women are more cooperative than men increasing the company’s profitability.A broader perspective may enable the board to better the assessment of stakeholders needs resulting in enhanced board’s ability to address Corporate Social Ratings.
Companies with more women on their boards are more charitable and more involved in environmental works, (Wang & Coffey, 1992). Presence of women on boards of directors enhances decision making. Women are mare participative, tolerant, democratic and communal. They are able to involve all members and evaluate each idea bringing about better performance in companies (Daily & Dalton, 2003; Rudman & Glick, 2001; Eagly, Johanssesen & van Engen, 2003).
REFERENCES
Brajesh, K. (2010), Competing Human Interest: The Key Domain for an effective corporate Governance, Advance in Management, 3(11), 7.
Daily, C.M. and D.R. Dalton (2003), Women in the Boardroom: A Business Imperative, 8-9.
Eagly, A.H, Johannesen-Schmidt and M.L. Van Engen (2003), Transformational, Transactional and Laissez-faire Leadership Styles: A Meta-Analysis comparing Women and Men, 569-591.
Gurbuz, A. O., Aybars, A.& Ozlem, K.(2010), Corporate Governance and financial performance with a perspective on institutional ownership, Journal of Applied Management Account Research, 8(2), 21-22.
Hillman, A.J, Cannella, and Harris (2002), Women and Racial Minorities in the Boardroom: How do directors differ? 747-763.
Konrad, A., V. Kramer and S. Erkut: 2008, ‘Critical Mass:
The Impact of Three or More Women on Corporate
Boards’, Organizational Dynamics 37(2), 145–164.
Nowell, C. and S. Tinkler (1994), The influence of gender on the provision of a public good, 25-36.
Robinson. And K. Dechant (1997), Building a Business Case for Diversity, 21-30.
Rudman, L. A. and P. Glick (2001), Perspective of Gender Stereotypes and Backlash Towards Agentic Women, 743-762.
Wang, J. and B. Coffey (1992), Board Composition and Corporate Philanthropy, 771-778.
Williams, R. J.: 2003, ‘Women on Corporate Boards of
Directors and Their Influence on Corporate Philanthropy’,
Journal of Business Ethics 42, 1–10.