Research by UQ Business School’s Renee Adams has found women appear to significantly enhance the monitoring capacity of the boards they join.
Using detailed data sourced from the US Investor Responsibility Research Centre, Professor Adams and co-researcher Dr Ferreira found boards with more female directors were characterised by greater participation of directors in decision-making; tougher monitoring of the CEO; and more alignment with the interests of shareholders.
Professor Adams said the research provided empirical evidence to support what has – until now – been a largely ideological debate.
“Boards around the world are under pressure to recruit more women with some countries legislating quotas to improve diversity on boards,” Professor Adams said.
“From January last year, companies in Norway have been required to ensure at least 40 percent of directors are female.
“Spain is following suit with their quota, also 40 percent, coming into effect from 2015 and Sweden is threatening to do the same.
“The research suggests there will be a measurable improvement in the monitoring capacity of boards incorporating more women.
“However, our findings do not support the argument for quotas as increased monitoring can be counter-productive in well-governed companies.
“Ultimately decisions about board composition must be made at the company level, taking into account other board characteristics.
“What our evidence does show is that women board members are not mere tokens.”
The research is to be published in the Journal of Financial Economics.
Media: Cathy Stacey (07 3365 6179, 0434 074 372).
