How does the gender of board and executive management influence the strategic decissions that is takeing in a company? According to my own research there are is a gender impact on some of the key financial parameters such us Operating profit (EBIT) and Earnings per Share (EPS).
Financial indicators are by most companies considered to be the most important indication of how well or bad the company is doing overall, regardless of any CSR programs it might have. In relation to EBIT results show that companies with above average diversification on board and executive management do considerable better than the ones that have not embraced this form of diversity. While the variations when it comes to EPS the results are less salient but there is a impact which investors can consider as a screening indicator.
These differences in economic performance can be explained using a framework of gender behaviour and traits. When it comes to the traits which influence financial performance, I argue, that women’s tendency to be more adaptable and risk averse influence the organisations that they are part of and helped positively in their financial decision making process. While men’s traits, especially during the financial crisis and subsequent downturn in 2008, are perceived as being rigid in their business approach. Coupled with a willingness to take on more risk without changing their business model have damaged the male dominated companies’ ability to create positive financial results for their organisations in times when a new approach was needed.
However, when it comes to EPS male dominated companies are able to do just as good as their more diversified counterparts. I contribute this to the male trait of entrepreneurialism which favours finding new ways to reduce costs in order for the company to be able to maintain a high level of shareholder returns. While diversified companies are able to maintain their level of EPS without these drastic moves because they were able to anticipate and make the necessary adjustments in time.