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Opportunities to Increase Number of Women in Leadership

Originally published by JT Godfrey for University of Michigan News

Since the early 1970s, there has been a worldwide promise to support women in achieving positions of authority in U.S. corporations. However, the business world has not necessarily met that promise. Cindy Schipani, Merwin H. Waterman Collegiate Professor of Business Administration and professor of business law, explores some of the limiting factors and opportunities for improvement in her recent research.

In the paper “Women in Power: Clearing Pathways for Women to Rise to Positions of Organizational Leadership,” Schipani and her co-authors explore numerous benefits of including women in leadership roles in business and government. These benefits include enhanced economic performance, reputational advantages for organizations, and more.

However, despite the rich literature showing the overwhelming positives of inclusionary practices for women in leadership roles, as of 2021, fewer than five countries have achieved significant gender inclusion in executive leadership roles.

So, how can businesses, policymakers, and industry leaders remediate this lack of representation? Schipani and her colleagues take a four-tiered approach to show:

  1. The effect of various legislative, organizational, and individual initiatives to increase the representation of women on boards. 
  2. The benefits for women in the workforce. 
  3. Analysis of mentoring as a means of fostering equality in the workplace. 
  4. Business success stories and a potential roadmap for organizations to provide women pathways to positions of leadership.

Schipani discussed some of the key findings of her study in the following Q&A.

Your paper explores the effect of legislative, organizational, and individual initiatives. What are some of the unique features that position these three sub-groups to effect change?

The legislative initiatives are the most effective.  When companies have a legal requirement, they comply.  We see this in Europe, where various European countries have mandated a certain percentage of women on boards. In the United States, there has been some movement towards regulation. For example, a legislative initiative in California, which, in the first phase, required one woman on each board of California companies, was highly effective. The California law, however, was challenged and found unconstitutional by a California court. The case is on appeal, so time will tell if the California legislation will withstand constitutional scrutiny.

On the other hand, business organizations can be immediately proactive in seeking to increase gender diversity on boards. They can search for qualified candidates more broadly rather than simply through traditional networks, which have been historically comprised of mostly white males.
The individual initiatives we mention in the paper are promoted by prominent women. These initiatives give exposure to the issues. In some cases, they also include training and mentoring programs, which are very helpful.

Were there any initiatives that surprised you in their efficacy or lack thereof?

I was surprised with how successful the California legislative initiative was, at least while the law was in full force and effect. Companies without women on their boards added women. It’s particularly interesting that not a single company challenged the law. Instead, a taxpayer brought the lawsuit. It will be interesting to see what the California appeals court decides.

Your paper shows the many benefits of women’s participation in business leadership. What were some of the most impactful benefits?

I think some of the most impactful benefits are bringing diverse viewpoints to the table, thus improving decision-making. This aids the company by essentially providing more data. This is not to say that there is a single “woman’s viewpoint” because, of course there is not. But, based on professional and life experiences, diverse board members can offer different perspectives than might be considered by a non-diverse board.  Research has also suggested that having women in leadership signals an open-mindedness on the part of the company, which may, in part, explain some of the correlated financial benefits.

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