Additions to Corporate Boards; the Effect of Gender

Findings and Conclusion: This research shows that women are still unrepresented in top management globally. The difference in performance of the companies in the same country and same industry implies that diversity serves a competitive differentiator. Certain companies focus on gender diversity and others focus on ethnic and racial diversity but no company in the top quartile focus on both. Companies which have greater diversity are able to attract top talent, improve internal and external customer satisfaction, improve decision making and hence improve

In the global market, female’s advancement and progression in the various workplaces have taken tremendous strides for the past five decades. However, several studies demonstrate that in spite of the rising number of female employees in different management positions, managerial positions across the world continue to be dominated by the male gender. By presenting the current existence of women in several leadership positions as compared to the period between the late 1960s to the 1990s, where the female percentage in those positions was very small. However, different media, as well as cultural reference, assume the disparity that exists and celebrate it. Occasionally, authors have criticized such discriminative practices on various grounds since, in some part of the world, women getting promotions in their respective workplace is illusionary. Thus, a manager hesitant to consider the promotion of a woman based on existing beliefs and vices about the women’s role in the society is the core thesis upon which the discussion of this paper will be based.

Women entered the labor workforce in large numbers in the 1940s, yet over 70 years later debates over leadership effectiveness and gender differences are still ongoing. Through ingrained global and organizational biases, stereotypes, and conditioning, men and women are expected to bring bring two different skill sets to the boardroom.

THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ECONOMICS ECON1202/2291 QUANTITATIVE MEHODS A FINAL EXAMINATION SESSION 2 2008

-2Abstract There is a direct correlation between corporate finance performance and women in leadership roles. The number of female college graduates and overall percentage of females in the workforce is increasing. Therefore the pipeline of women has greatly increased and companies have to capitalize on this to ensure these companies are going to retain, attract and develop this pool of talent. An equal balance of qualified men and women can only be achievd when top

This research is being submitted on June 14, 2010, for Mr. Bergeen’s Microeconomics course at Rasmen College by John Divler.

Although in 2012, only 18 women served as CEOs of Fortune 500 companies. Furthermore, in a recent report, women only held 16.6% of board seats in 2012 in the fortune 500 companies (Aguilar). Women are somehow being held back from achieving their higher potential, and is is not due to lack of education. The department of education found that “140 women will graduate with a college degree at some level this year for every 100 men”(Aguilar). Most people believe the reason is because of the phenomenon of the “glass ceiling”. Many large companies do not hire women for the upper level positions, because they have always hired men, and many companies may believe that they do not see women in that position. This is also influenced by the media as well, as “women hold only 3% of clout positions in telecommunications, entertainment, publishing and advertising.”(Newsom 2011). With so few women leaders in the media industry, women are rarely portrayed in highly respected executives roles. This in turn communicates to young girls and the public in general that women are not supposed to hold these

This myth has been perpetuated throughout history and in result; we have barriers such as the glass ceiling in existence. If we were to pull up a list of the Board of Directors for any given company, the probability of it being a predominately male group is high. This notion alone shows how companies have continued to dwell in olds days where men are considered more capable than women. The Glass ceiling effect has continued to place barriers against women endeavor in achieving success in their careers and participation in their work place. Women have not been able to realize their potential in their work places since they are not offered equal chances as compared to their men counterparts who enjoy great opportunities in organizations. The fact that an organization is ran by men, may cause an adverse effect on the performance of men. Obviously, a man thinks differently than a woman. It is likely that a decision made by men only is likely to ignore the interests of women in the organization. This creates a domino effect because it affects the woman’s performance in business since they only get limited chances to learn, and limited job assignments that will enhance their skills. Hence, low or limited skills and experience will lower their overall

While women make up 46.6% of the Fortune 500 workforce and 51.4% of middle management, according to Catalyst, in these companies they represent only 14.1% of executive officers, 7.5% of the highest paid and only 4% of CEO’s Despite the fact that women have a foot in the door with 4% of all CEO positions of the Fortune 500, the rest of their frame is stuck in the entry level, which is 46.6% of the Fortune 500 workforce. The difference is not in men and women; it is in masculine vs. feminine ways of thinking and acting. Both men and women incorporate masculine and feminine approaches (Forbes).

There are so many different factors that go into the equation of what makes a good employee and a person's sex shouldn't be one of those. There are women who have managed to battle their way into the upper ranks and who have likely worked much of this out for themselves (Bellstrom, Kristen and Zarya 24). This shows us that women are determined to make something of themselves and that they will rise above any stereotypes or discrimination to make the workplace more diverse and equal for all. Robinson was asked how women effect the workplace. “Women definitely bring more diversity to business and a great amount of knowledge coming from a different viewpoint. They also bring a different emotional side to business which I think can be a good thing.” Are female customers more difficult to work with than male customers? “Typically no, not in this business. This is not a retail business. I would say that men ask more questions than women as far as accounting goes. I think this is because typically in the family dynamics of things, men usually handle the financial aspects of things.” said Robinson. In 1974, only four percent of all MBA graduates nationwide were women. In 1994 thirty six percent of the ranks of graduating MBAs were women (Haddock 24). Showing that women are hiking their way up to the top. That number has more than increased since then. Gender diversity in corporate businesses and top management groups has received growing attention from academics, investors, interest groups and professional research firms. Diversity is supposed to be a sensible approach to improve board effectiveness and performance (Labelle et al 1). In recent years, the issue of appointing more women as directors has also captured the attention of policymakers and research on gender diversity in the business establishment. The slow pace at which business is integrating gender diversity has started to get government involved (Labelle

In the recent years, many women have made progress in obtaining jobs as CEO’s of major companies, hold seats on the board of directors, and many other high profile positions however, the percentage of women and minorities that hold these positions are very low in comparison to males hence, the glass ceiling remains. The term Glass Ceiling is the “unseen, yet unbreachable barrier that keeps minorities and women from rising to the upper rings of the corporate ladder, regardless of their qualifications or achievements” (Glass Ceiling Commission, 1995). Stereotypes and biases have created an image that women are not capable of effectively filling the role of managerial jobs. In 1995, Glass Ceiling Commission noted that women filled only 3 to

This article reveals the disparities in the workplace due to gender stereotypes favoring men over women in executive positions. Women have a much more difficult path to obtain executive positions, and maintain them. This article helps by showing the number of high-level women in fortune 500 companies. U.S. Department of Labor indicates that women occupy more positions in executive and managerial roles. However, with closer examination of Fortune 500 companies, only two women occupy the position of CEO opposed to their

International Research Journal of Finance and Economics ISSN 1450-2887 Issue 49 (2010) © EuroJournals Publishing, Inc. 2010 http://www.eurojournals.com/finance.htm

In August 2012 a team of researchers at the Credit Suisse Research Institute issued a report in which they examined 2,360 companies globally from 2005 to 2011, looking for a relationship between gender diversity on corporate management boards and financial performance. Sure enough, the researchers found that companies with one or more women on the board delivered higher average returns on equity, lower gearing (that is, net debt to equity) and better average growth.

Even though numbers are slowly rising in the United States, there are still more men in executive positions than women. According to one survey, female workers only made up 43% of legislators, senior managers, and senior officials whereas male workers made up 57%. In congress, congresswomen make up only 17% of representation compared to congressmen making up 83% (Ferrante, 2011, p. 312). Gender stratification is one explanation for the tremendous gap. Ferrante (2011) describes gender stratification as the unequal distribution of opportunities and resources amongst male and female employees. (p. 311) For example, male workers have an increased opportunity to receive a promotion than a female worker. According to Tinsley (2013), women are more likely to receive executive positions when a company is doing well, rather than when a company is suffering. Some companies stereotype that women workers will leave the workforce soon to bear children, limiting their chances of achieving executive status (Ferrante, 2011, p. 316).