Recent Industry Reports:
♦ The 2020 Women Corporate Directors/Pearl Meyer Thought Leadership Commission Report: Work Has Changed: How Boards Navigate Disruption and Drive Human Capital Transformation available here.
♦ “Significant Progress but not for Everyone”. The 2020 Boston Club Census of Women Directors and Executive Officers of Massachusetts Public Companies, co-authored by Pat Flynn, Toni Wolfman and Cynthia Clark, is available here.
◊ See also the Boston Globe article on our findings.
In this article we examine the role of alignment between organizational social consciousness and the informal and formal institutions of a country in increasing female representation on boards. During the years 2006–2020, we find that the greater the alignment between organizational social consciousness and certain formal (i.e., a gender quota) and informal (i.e., high gender equality) institutions, the more progress there is toward gender representation on corporate boards in Europe. We also find that more socially conscious firms make the most progress, often going beyond the minimum regulatory targets.We note the need for policymakers to go beyond mere codification of rules via quotas and simultaneously work toward raising national and organizational social consciousness levels on issues of gender equality. This research provides clues for the U.S. as various states and exchanges begin to adopt quotas.
Business Ethics: A European Review: “How do standard setters define materiality and why does it matter?” 2021
Material information is a core aspect of a firm’s governance and reporting activities. If corporate information is material, then the firm has a responsibility to disclose it. Currently, firms must judge information as material largely based on a confusing set of standard setters’ definitions. I analyze the particular conditions laid out by each standard setter and explain the ethical implications that result from materiality judgments made by firms using these varied standards. Importantly, this analysis underscores that regulators, firms, and researchers alike must consider the impact of these implications on the fiduciary duty and promise-keeping that firms make as well as the potential for unfairness and financial harm to others’ welfare that could result. Read article here.
Journal of Business Ethics: “Corporate Social Responsibility Disclosures and Investor Judgments in Difficult Times: The Role of Ethical Culture and Assurance” 2020.
We conduct an experiment with 459 nonprofessional investors to examine whether they evaluate companies differently based on management’s stated purpose for undertaking corporate social responsibility (CSR) activities in the presence versus absence of a company-specific negative event. Specifically, we vary whether or not management intends to achieve financial returns from CSR activities in addition to promoting social good. Read the article
Strategic Management Journal: “Beyond tokenism: How strategic leaders influence more meaningful gender diversity on boards of directors” 2019.
We employ an exploratory approach to understand what differentiates boards that retain limited, potentially tokenistic, gender diversity (i.e., a single female director), and boards that more genuinely diversify their composition by appointing additional female directors. Previous studies have speculated that strategic leaders responsible for board appointments may influence this occurrence. Using longitudinal data on U.S. firms, we find that more female top managers and having the sole female director serve on the nominating committee increase the likelihood of additional female director appointments. Boards and nominating committees with younger members amplify these effects, respectively. Read the full article
Journal of Business Ethics: “Authenticity and Corporate Governance” 2019
Although personal attributes have gained recognition as an important area of effective corporate governance, scholarship has largely overlooked the value and implications of individual virtue in governance practice. We explore how authenticity—a personal and morally significant virtue—affects the primary monitoring and strategy functions of the board of directors as well as core processes concerning director selection, cultivation, and enactment by the board. While the predominant focus in corporate governance research has been on structural factors that influence firm financial outcomes, this paper shifts attention to the role of authenticity and its relationship to individual board member qualities and collective board activities. We explore how authenticity has the potential to influence board dynamics and decision making and to enhance transparency and accountability.
Over the last several years, competing notions of “diversity” have emerged. In many corners, the traditional definition, focused on demographic diversity, has been eclipsed by a new concept centered on experiential or cognitive differences. Deloitte, a provider of advisory services to firms around the globe, including 85% of the Fortune 500, encapsulates the trend, noting, “Up to now, diversity initiatives have focused primarily on fairness for legally protected populations. But organizations now have an opportunity to harness a more powerful and nuanced kind of diversity: diversity of thought.” Similarly, Korn Ferry, a global management consulting firm, urges firms to reorient their recruiting efforts to emphasize “diverse perspectives, experiences, and contributions.”
For additional research, please click here.