Title: Why women make better directors

Authors: Chris Bart; Gregory McQueen

Addresses: DeGroote School of Business, McMaster University, Ontario L8S-4M4, Canada ' School of Osteopathic Medicine in Arizona, A.T. Still University, Arizona 85206, USA

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.

DOI: 10.1504/IJBGE.2013.052743

International Journal of Business Governance and Ethics, 2013 Vol.8 No.1, pp.93 - 99

Published online: 17 Apr 2013 *

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