Women Representation On Boards Affects Gender Inequality In Firms: Study Reveals

A collaborative study by researchers at the University of Otago and Purdue University in the United States has found having more female representatives on a company’s board produces fairer gender distribution in the rest of the firm.

Specifically, women holding positions ranging from key management, executives and senior managers, appear to reduce workplace gender segregation. This benefit is a result of the improved power balance that comes from having women in leadership at the top of the organisational ranks.

The study, published recently in Human Resource Management examined publicly available data from the Workplace Gender Equality Agency looking specifically at Australian firms. Co-author, Dr Helen Roberts of Otago’s Department of Accountancy and Finance, believes the results can help inform any group that wants fair distribution of roles across an organisation.

“The findings are particularly relevant to board nomination committees, board chairman, CEOs and organisational leaders who seek work environments that do not exhibit gender segregation – or put simply – the appointment of more women directors has broader effects on workplace gender equity,” Dr Roberts says.

The research found evidence of a critical mass effect, specifically, women’s representation needs to exceed about 2 board positions, or 20 percent, to be effective in reducing gender segregation.

“Having one woman on a board may not be enough to promote change but rather two or more women directors, or holding 20 percent or more board seats, appears to be more effective in reducing gender segregation. These findings demonstrate having more women on corporate boards has broader effects on workplace gender equity beyond the top leadership,” says Dr Pallab Biswas, also of Otago’s Department of Accountancy and Finance.

The research team, including Dr Kevin Stainback, a Professor of Sociology at Purdue University in the US, Dr Pallab Biswas, and Dr Roberts from The Otago Business School, believe the results can be extrapolated from the Australian context to reflect organisations in both New Zealand and the United States, given the similar organizational structures in the three countries.

The team are hoping to extend the research to better understand how women on boards can promote diversity in organisations, and how less segregated work environments benefit both women workers and the whole organization.