The fairer sex

And in this context, “fairer” might just mean more honest and less corrupt.  In a recent index published by an American provider of, well, indices, it was revealed that companies with a higher-than-average proportion of women on the board are less prone to fraud, bribery and corruption.  The November 2014 results of the “2014 Survey into Women on Boards” (by which I assume they mean “… of directors”, rather than “surf-“ or “skate-“ or even “ironing”) tell us that although the proportion of women in board positions continues to creep up, “the vast majority of the gains are coming from markets that have instituted mandates and regulations to boost the ranks of women on boards”.  But when they do manage to reach the top tier – the C-room, I believe it’s called – women have a very positive effect on the behaviour of their companies.

As the survey explains: “Boards with gender diversity above and beyond regulatory mandates or market norms had fewer instances of governance-related scandals such as bribery, corruption, fraud, and shareholder battles.”  And their positive influence carries on into future decisions, as “there is preliminary evidence that companies with more women on their boards tend to display overall stronger management of ESG-related risks”.  (To save you looking it up, because I had to, ESG stands for ‘environmental, social and governance’.)

Is it possible to speculate on why this might be without offending sensibilities at every turn?  All I can do is give my own view – that of a woman in her late-mid-forties – and apologise in advance for any sexism, ageism or any other -ism that I might inadvertently display.  In my experience, males (both boys and men) tend to be more risk-taking, more show-offy and less willing to back down than girls and women of the same age.  So an all-male board might be willing to take a more aggressive, more confrontational stance when faced with a potential risk (“What the heck – let’s go for it!”) than one tempered by a female influence.  Of course there are plenty of cautious men and reckless women serving on boards, but if the average female director has the effect of protecting her average company from all sorts of nasties, it’s an interesting finding.

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6 Responses to The fairer sex

  1. erskinomics says:

    Yes, and research shows also that women commit fewer crimes. Until there is any research showing that promoting women to positions of power corrupts them, your proposal seems the easiest way to de-risk an organisation and keep it away from crime.

  2. Pingback: The Fairer Sex - Compliancex | Compliancex

  3. Now there’s a proposal, Erskinomics! On a related note, my own research and reading (which is random rather than scientific) has turned up two areas of crime in which the proportion of female perpetrators is increasing: money laundering, and people trafficking. Both require people skills, tact and patience, so that your victims trust you – and women are often better at this than men.
    Best wishes from Susan

  4. Robert Long says:

    Here you’re faced with the age old issue of correlation and causation. Is there less risk because of more female board members, or viscera versa or are both the product of an as yet unknown third factor? Personally I would suspect the later though that is just a guess.

    Maybe an organisation that puts more women on boards is also more cautious? Perhaps a more diverse board selection shows a company with a more open culture which has also been show to prevent corruption, bribery and other offences?

    Still if we can get more diverse boards that is only a good thing. If nothing else it will clear this up as I suspect that at the moment the conclusion on the effect of female board numbers involves a depressingly small sample size…

  5. Quite right to question the causality, Robert – but your final comment about the diversity of boards is a good one. The more different risk appetites are represented, the better the discussions about risk – if everyone’s a daredevil or if they’re all scaredy-cats, that’s not good for informed decision-making.
    Best wishes from Susan

  6. Pingback: Deadlier than the male | I hate money laundering

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