Women Make Better Decisions Than Men, Study Suggests

http://www.sciencedaily.com/releases/2013/03/130326101616.htm

by Bioethics, sciencedaily.com
March 25th 2013

Women's abilities to make fair decisions when competing interests are at stake make them better corporate leaders, researchers have found.

A survey of more than 600 board directors showed that women are more likely to consider the rights of others and to take a cooperative approach to decision-making. This approach translates into better performance for their companies.

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"We've known for some time that companies that have more women on their boards have better results," explains Bart. "Our findings show that having women on the board is no longer just the right thing but also the smart thing to do. Companies with few female directors may actually be shortchanging their investors."

Bart and McQueen found that male directors, who made up 75% of the survey sample, prefer to make decisions using rules, regulations and traditional ways of doing business or getting along.

Female directors, in contrast, are less constrained by these parameters and are more prepared to rock the boat than their male counterparts.

In addition, women corporate directors are significantly more inclined to make decisions by taking the interests of multiple stakeholders into account in order to arrive at a fair and moral decision. They will also tend to use cooperation, collaboration and consensus-building more often -- and more effectively -- in order to make sound decisions.

Women seem to be predisposed to be more inquisitive and to see more possible solutions. At the board level where directors are compelled to act in the best interest of the corporation while taking the viewpoints of multiple stakeholders into account, this quality makes them more effective corporate directors, explains McQueen.

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Boards with high female representation experience a 53% higher return on equity, a 66% higher return on invested capital and a 42% higher return on sales (Joy et al., 2007).

Having just one female director on the board cuts the risk of bankruptcy by 20% (Wilson, 2009).

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Women make other board members more civilized and sensitive to other perspectives (Fondas and Sassalos, 2000) and reduce 'game playing' (Singh, 2008)
Female directors are more likely to ask questions rather than nodding through decisions (Konrad et al., 2008).