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Firms with more women leaders better corporate citizens

Thursday, November 17, 2011  
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Companies with more women in senior leadership not only outperform firms with fewer women leaders, they are more likely to be good corporate citizens, according to new research by Catalyst and the Harvard Business School.

Companies with more women board directors and corporate officers contributed significantly more charitable funds, on average, than companies with fewer or no women in senior roles, according to "Gender and Corporate Responsibility: It’s a Matter of Sustainability.”

"Companies are realizing that advancing more women to senior leadership roles has many benefits, including increased financial performance and sustainability,” said Anabel Pérez, senior vice president, development, Catalyst. "As this study shows, inclusive leadership has a positive influence on the quantity and quality of an organization’s CSR initiatives. When business leadership includes women, society wins.”

In 2007, the average donations of companies with three or more women directors were 28 times higher than those of companies with no women directors, the study found. Companies with 25 percent or more women corporate officers in 2007 made annual contributions that were 13 times higher than those made by companies with zero women corporate officers.

Between 1997 and 2007, companies with more women board directors donated significantly more funds than did companies with fewer women -- with each additional woman board director representing an increase of $2.3 million. Companies with more women corporate officers donated significantly more funds between 1997 and 2007, and for each percentage point increase in women corporate officers, yearly donations increased by $5.7 million.

These higher contribution levels are demonstrably linked to having more women in senior leadership roles, not merely to the size of a company’s budget, Catalyst reported. Controlling for key factors that might influence donation levels, such as a company’s overall financial performance, size and industry, the presence of women leaders still had a significant positive impact on a company’s levels of giving.

Studies have shown that women leaders may bring diverse perspectives on fairness and the distribution of resources to donation decisions, which may in turn broaden a company’s commitment to corporate social responsibility and increase its levels of charitable giving.

The Catalyst/Harvard Business Review study indicated companies with more women leaders are not only more committed, on average, to corporate social responsibility, they may also be better at it, developing higher-quality initiatives. Leaders who highlight gender issues in corporate social responsibility strategies often position their organizations for sustained growth, which pays dividends to the communities their companies serve and society at large, according to the report.

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