Title: Why women make better directors
Author: Chris Bart; Gregory McQueen
DeGroote School of Business, McMaster University, Ontario L8S-4M4, Canada
School of Osteopathic Medicine in Arizona, A.T. Still University, Arizona 85206, USA
Journal: Int. J. of Business Governance and Ethics, 2013 Vol.8, No.1, pp.93 - 99
Abstract: The positive correlation between the presence of female directors on boards and corporate performance suggests that women appear to make better directors than men. But why? Using the Defined Issues Test (DIT) instrument (Rest, 1979, 1986), 624 board directors (75% male; 25% female) were surveyed to determine their reliance on three reasoning methods (i.e., Personal Interest, Normative and Complex Moral Reasoning or CMR) to make decisions. The results showed that female directors achieved significantly higher scores than their male counterparts on the CMR dimension which essentially involves making consistently fair decisions when competing interests are at stake. Since directors are compelled to make decisions in the best interest of their corporation while taking the viewpoints of multiple stakeholders into account, having a significant portion of female directors with highly developed CMR skills on board would appear to be an important resource for making these types of decisions and making them more effectively.
Keywords: women directors; corporate governance; director recruitment; director selection; company boards; company directors; men; males; females; gender; complex reasoning; moral reasoning; defining issues test; DIT; moral development; James Rest; governance committees; nominating committees; corporate performance; reasoning methods; personal interest reasoning; normative reasoning; defined issues test; decision making; female directors; male directors; fair decisions; competing interests; multiple stakeholders; business governance; business ethics.