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Female board members make bolder decisions

Monday, May 13, 2013   (0 Comments)
Posted by: Barbara Francella
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Women on corporate boards tend to be more open to new ideas and more likely to speak up in favor of bold decisions than their male counterparts, key traits that often lead to their companies’ financial success, according to a study recently reported in Canadian Business magazine.

Women board members are more likely to rely on "co-operation, collaboration and consensus building” in situations that call for complex decisions, according to the study, co-authored by Chris Bart of McMaster University and Gregory McQueen of A.T. Still University. In contrast, male directors tend to make decisions according to "rules, regulations and traditional ways of doing business,” according to the study of 624 Canadian board directors, 75 percent male and 25 percent female.

During the study, participants were given morally conflicting scenarios and asked to solve each problem and explain how they arrived at their decision. Women were more likely than men to consider fairness and the interests of multiple stakeholders in their decision-making process.

"Women seem to be predisposed to be more inquisitive and to see more possible solutions,” making them "more effective corporate directors,” Bart said.

Men, on the other hand, still function as "pack animals. They would be very unhappy with people coming in with different values or views to the board.”

Women make up a mere 11 percent of board members at companies listed on the S&P/TSX Composite Index, which represents more than 240 of Canada’s largest companies, according to a recent analysis by TD Bank. Forty-three percent of the companies reported no female board member; 28 percent reported only one.

"Why would governance, nominating committees and board chairs not want to have that skill set, that competence available to them in abundance?” Bart asked. "It’s no longer just a question of it being the right thing to do, to have women on the board. It’s the bright thing to do.”

The study’s results send a very strong signal to investors and shareholders, who would benefit from increasing gender diversity in boardrooms. "There’s a huge pool of qualified, available women who would certainly be eligible based on their experiences to fill the boardroom seats,” Bart said.

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