December 15th, 2010 | 1:00 pm

Leadership Gender Quotas – The Research Perspective

filed under Managing Change

boardroom womanBy Melissa J. Anderson (New York City)

Has the time come for bolder policies for diversity at the top of corporations?

That’s what was discussed last Friday at a conference hosted by the Athena Center for Leadership Studies at Barnard College and the Sanford C. Bernstein & Co. Center for Leadership and Ethics at Columbia Business School.

The first half of the conference focused on academic research on the subject, performed by social scientists and researchers from top business schools. The second half focused on the practitioner perspective (check back next week for another article discussing the practical reality of corporate gender targets).

By and large, the researchers agreed that a more targeted approach to gender balance in corporate leadership would be beneficial. Kathryn Kolbert, Director of the Athena Center for Leadership Studies and Professor of Leadership Studies at Barnard, said, “When you change the people at the table, you change the conversation.”

The Indian Analogy – Participation, Effectiveness, and Role Models

Bruce Kogut, Professor of Leadership and Ethics and Director of the Sanford C. Bernstein & Co. Center at Columbia University, opened the conference, explaining that research into the value of gender targets or quotas in a business context is difficult to research, simply because the sample size of women leading the largest companies is so small. For this reason, he continued, we must often look to studies of female leadership in other cultures and contexts, and seek out analogies.

The conference’s keynote address, by Esther Duflo, Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT, studied the effects of gender quotas in the Indian political system. According to Duflo, the country has legislated that 1/3 of all village council seats must be comprised of women. Additionally, 1/3 of village council chiefs must be women.

The research was clear – the quota system paid off, in terms of participation, effectiveness, and creating role models.

Those councils with female leaders tended to be more accessible – with meetings held at times women could attend them and in places where women simply could go. Analogously, Duflo said, in the corporate world, companies with a female chairman of the board are unlikely to hold board meetings at 10pm, or at other times when family responsibilities usually take precedence.

Interestingly, she said, the research team did not observe a spike in female attendance in these meetings. But it did observe a spike in female participation. “They were much more likely to speak,” she said. In fact, everyone seemed much more likely to speak, which had implications for new leadership and democracy.

Additionally, those councils with women leaders had less corruption, and a greater focus on building water wells and new schools. In general, they saw more getting done. “If you put less in your pocket, there’s more to go around,” remarked Duflo.

And the effect was sustained. If villages reverted to a male leader in the next couple of years, corruption remained low.

Finally, the research indicated that female village chiefs not only changed stereotypes, but created role models for teenage girls. “After two years, people were more likely to associate women in politics in places where there was a woman political leader.”

Additionally, after two cycles of female leaders, girls were more likely to say they want to have a career and that they want to be a village chief.

Duflo summed it up, “Quotas do matter. They effect female participation, they increase the public good, and they reflect a greater willingness to elect women in the future and increase teenager aspirations.”

More Quota Studies

The next panel featured some of the most recent research on the value of gender quotas or targets, as well as research into how they can be implemented successfully.

Amy Dittmar, Associate Professor of Finance, Stephen M. Ross School of Business at the University of Michigan, discussed her study, “The Impact of Firm Valuation of Mandated Female Board Representation,” based on the Norwegian experience of boardroom quotas. In 2003, the Norwegian government legislated that women must hold 40% of all board seats of publicly traded companies. “For firms that already had women on their board, the stock reaction was positive. But for most firms it was negative,” she said.

Dittmar’s research showed, “It was not the gender that mattered. What explains the drop in value is that [the individuals selected to take the board positions] had less experience.” This had important implications in the pipeline development space.

She also reported that the percentage of public firms going private has increased since the legislation, and that the percentage of Norwegian firms that had begun listing themselves instead in the UK has also increased. Both of these anecdotes reveal that firms are looking for ways around the government’s intervention.

Next, David Ross, Assistant Professor at Columbia Business School, discussed the value of diversity in business strategy. He said, “When you have people from an outgroup, it tends to improve decision making.” Since firms are all operating in a difference context, he said, his research team produced a longitudinal study of firms in the S&P 1500, on the effects of having greater numbers of senior executive women at the same firm over time. The results?

“The exact same company tends to do better when they have one senior executive woman than when they don’t,” he reported.

In another study based on Danish business leaders, Ross found that, “When a CEO has a daughter, female wages rise relative to the wages of men.” This indicates that the “would you want your daughter to work here” question has proved salient in practice.

Following Ross, Mona Lita Krook, Assistant Professor of Political Science and Women and Gender Studies at Washington University in St. Louis, presented “Quotas for Women on Corporate Boards: Lessons from Politics.” Political gender quotas have been in place for significantly longer than corporate ones, so there is more data available for research, she explained.

Krook said that the lack of women in leadership positions can be examined from an economic perspective. On the supply side, the question is whether there are enough female leaders. “This is not the case. There are plenty of qualified women.” So the issue must be on the demand side, she explained. “Women are qualified but discriminated against and this is when the quota system comes into play.”

A number of countries have enacted political gender quotas, but, she said, resistance to political quotas is incredibly strong. Individuals and governments have worked hard to undermine them.

Non-quota strategies (or supply-side strategies like pipeline development), she said, have a much more modest effect on political systems than a targeted approach. Quota systems are a means of fast tracking female leadership, and have a greater effect on role models, democracy, and participation.

Finally, Susan Sturm, George M. Jaffin Professor of Law and Social Responsibility, Columbia Law School, gave a talk on “Reframing the Equality Agenda.” Sturm’s talk focused on the practical implications of how to incorporate gender diversity within an organization.

“What’s going to connect the move at the top to more systematically rooted changes?” she asked. According to Sturm, culture change has to be involved in generating more balanced corporate leadership and institutional change.

5 comments

  1. Andrea Learned

    Very interesting research/panels. I’d suggest it’d be important to add to the coverage a conversation about leadership in sustainability/sustainable business, as well. Recently published research by Aaron M. McCright (MSU) on the effects of gender on climate change knowledge (U.S.) makes the point that seeming gender differences in how aware people are of it, and there perceptions of themselves on that front, are really about socialization. This also reminds me of a much simpler study of grocery store shoppers a few years back that found (stunningly) that women were faster shoppers. The point there, given a deeper look, was that.. women have tended to be more frequent shoppers – so of course they’d be faster. Good/fast shopping is not a matter of gender.

    Gender stereotypes from organizational leadership to consumer behavior seem to be getting a lot more notice lately.. and rightly so. This is how insights like the ones cited here turn up. These twenty-first century realizations about gender make the whole conversation more accessible for all, and more universal as an issue important enough to resolve.

  2. Anne Perschel

    Melissa – This is a great article and I’d like to share it outside the LinkedIn community. Is is available on the internet?

    Mike Myatt, who is named on some best leadership blog lists, wrote a strong piece reviewing his thoughts about the negative effects of quotas and “diversity police.” He was responding to to a post I wrote about the need for more women and people of diversity on “Best”_____” (anything to do with leadership) lists. I never mentioned quotas. Fascinating what even the mention of the word diversity can evoke. Those of us advocating for more women in order to secure the future need to beware of this type of reaction and have solid data that appears in this article to counter unvalidated opinions.

    In short, thanks for this terrific and very useful post.

    You can read our dueling blog posts at:
    http://germaneconsulting.com/best-leadership-blogs-should-be-leaders/(Mine)
    http://www.n2growth.com/blog/diversity/

  3. melissa

    Thanks, Anne. I’ll be sure to check out the conversation. Dissenting viewpoints can be the most valuable check on your own argument!

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