Innovation

Boards with women are more likely to dismiss CEO: Study

Myriam Robin /

We’ve heard a lot about the business case for getting more women on boards and why diversity delivers better decision-making.

But a new survey has found another reason for why this might be the case. According to the study, a corporate board’s performance improves with more female directors, because women contribute to the board being more likely to take action.

The Does the Gender of Directors Matter? report saw Northeastern and Harvard Universities economist Miriam Schwartz-Ziv investigate Israeli boards that have for 20 years been relatively gender-balanced.

By analysing 402 board and board-committee meetings of a number of these companies, she found that those with at least three male and three female directors were around twice as likely to take on a new initiative or request further information regarding an initiative, compared to those that don’t have such balance. These boards also generated higher shareholder returns.

Presenting her paper at the American Economic Association late last week where Bloomberg picked up the report, Schwartz-Ziv also found that the more women on the board, the more likely the company was to see the CEO shafted during a period of poor business performance.

She put the ability of these boards to take more action down to her finding that gender-balanced boards are better at communicating.

This piece was first published on our sister site, Women’s Agenda

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Myriam Robin

Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.

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