There are many good reasons for increasing gender diversity on boards: better decisions, better performance, and better representation of the consumer base.
But the idea, put forward in a variety of research over the past twenty years or so, that women on boards improve the moral and ethical decision-making of those boards has a number of problems for both women and men, in the boardroom and out of it.
First, having gender equality on the board is increasingly part of corporate social responsibility initiatives. Rather than ethical standards improving when women are on boards, it may be that organisations with a corporate social responsibility focus create a climate of gender equality. This may mean their boards include more women simply because corporate social responsibility and equality are related concepts.
Second, the idea that women will set improved standards of moral and ethical behaviour for boards is based on the (faulty) assumption that when boards are made up of only men they will be morally and ethically lax. Surely that is a sexist view of men, based on notions of men as irresponsible risk-takers?
Third, it places the burden of responsibility on women to make sure that boys on boards don’t behave badly. Surely that is a sexist view of women, based on the idea that a mother will be the moral and ethical compass for a family unit?
Women on Australian boards
Australia – like most other countries in the world – has a distinct lack of women on its corporate boards: just 17.6% of ASX 200 directors and only 5% of ASX 200 chairs are women, according to the Australian Institute of Company Directors. Australia’s Gender Equality Scorecard shows that in Australian organisations with 100 or more employees, 23.7% of directorships and 12% of chairs are held by women. More worryingly, only 8.8% have set targets to increase gender diversity on the board, yet 48.5% of employees in these organisations are women.
Researchers (and others) have consistently noted that this poor representation of women at board level is a problem and have sought to convince male-dominated boards to make room for women. In looking for evidence to support their arguments, some research linked women on boards with “…a strong moral overtone…”, with increased corporate social responsibility and with less unethical behaviour. Other research found the more women directors it had, the more likely a company was to appear on lists such as “The world’s most ethical companies”. And so over time women have come to be seen as the ethical “saviours” of boards.
Considered in the light of ambivalent sexism theory, this suggests that women might be allowed to join the – predominantly male – boardroom club provided they do so as nurturing, caring, peacemaking, ethical gatekeepers. In other words, boards might be convinced to accept women so long as those women conform to traditional ideas of feminine behaviour. I wonder what would happen if women turned out to be ineffective as ethical watchdogs in the boardroom?
Diversity benefits boards
Putting aside the faintly fishy idea of women on boards as ethical gatekeepers and men on boards as lacking in ethical and moral principles, what are some of the valid and non-sexist reasons for taking steps to increase the gender diversity on boards of directors? Here are a few:
- Diverse groups of people bring a greater variety of experience and different views to the decision-making process and then make better decisions
- Gender diversity on boards helps to ensure that the entire consumer base is represented. This is particularly important because women now control the bulk of household spending globally, according to the World Economic Forum
- Financial performance is better in companies that have gender diversity on the board. When women are included on executive committees, average return on equity improves by 47% and average earnings before interest and tax improve by 55%
- Diversity in the membership of groups making investment decisions may lead to more social responsibility in decision-making around fossil fuel divestment.
Personally, I constantly wonder why we need to justify to the world that 50% of the adult population should have equal access to the same opportunities as the other 50%. It seems the argument that women should hold 50% of board positions because they comprise 50% of the population is not good enough.
There are many good arguments for ensuring there are more women on boards. That women have the moral and ethical high ground over men and will therefore be ethical gatekeepers on boards is possibly not a very valid justification and one that should not be given too much airspace.
By Linda Peach