September 25, 2023 • By The UCI Paul Merage School of Business
Although women have long been underrepresented on corporate boards, the last decade has seen a dramatic shift as women have gained significant representation at the highest levels of corporate governance. As boards become more gender-diverse, what happens when women are present in the boardroom?
That’s the question Margarethe F. Wiersema, Dean’s Professorship in Strategic Management at The UCI Paul Merage School of Business, and her coauthor Marie Louise Mors, Professor of Strategy and Innovation at the Copenhagen Business School in Denmark, explore in their paper, “Women Directors and Board Dynamics: Qualitative Insights from the Boardroom,” recently published in the Journal of Management.
To find answers, Wiersema and Mors interviewed both male and female directors who have collectively served on more than 200 publicly traded company boards on the major stock exchanges in the US and Europe.
Evaluating how women influence boards is challenging in part because the historical record is scant. Wiersma and Mors describe the boardroom as a “black box,” thanks to confidentiality obligations and a traditional reluctance among directors to discuss what happens behind closed doors.
Based on their thorough research, the team was surprised by what occurs when women are present in the boardroom.
Women Do Their Homework and Are Ready to Address the Issues
For example, interviews revealed women directors often set a high standard for preparation. Women tend to be highly concerned with accountability and spend more time than their male counterparts reading materials and studying financials before meetings. The extra preparation and knowledge women bring to meetings has had an impact on the executives who now say they have to be prepared to be more engaged in board meetings.
Women Know What They Don’t Know and Are Not Afraid to Ask Questions
Another significant insight is women are not shy to acknowledge when issues aren’t clear and are more willing to ask in-depth questions and broach new topics. As one woman director said, “From someone who has been a director on more than 20 boards in the UK, US, and Germany, I have never sat on a board where a woman says nothing. Whereas I have sat on boards where men say nothing.” While men directors may also want more information, it is the women who do not hesitate to say they don’t know something and speak up and ask questions to more fully understand the issue.
Women Change the Atmosphere in the Boardroom
The study also reveals women have a direct influence on their male colleagues, resulting in board dialogue with less overt political behavior, greater willingness to ask questions, and an openness to different viewpoints. According to their research, “men directors have a tendency to show off their knowledge or refer to their own success,” while “women are less bothered by their ego and will ask the question because that is the right question to ask and will not care what anybody thinks.” As one director told the researchers, “Men become less competitive, [as] women create a more open atmosphere.” Through their presence, women change the dialogue in the boardroom and play a key role in enabling more nuanced, deeper discussions.
Women Directors Challenge Prevailing Assumptions about Gender Roles
That women directors ask in-depth questions and are willing to debate the issues reflects autonomy and rationality, attributes not typically ascribed to women. The study indicates gender stereotypes stemming from research at much lower organizational levels about how women behave do not appear to be pertinent to the boardroom.
The study also reveals the presence of women leads to greater scrutiny and attention to the issues that confront the board, enabling the board to be a more effective monitor of management.
Sage Journals: https://journals.sagepub.com/doi/10.1177/01492063231173421