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            Women Increase Board Effectiveness

            Women directors can reduce conflict in the boardroom

            Women directors can make boards work more effectively by reducing coflict and increasing board self-development activities, according to researchers from Norway and Denmark. 

            Morten Huse, professor at BI Norwegian School of Management and Sabina Nielsen, researcher at the Copenhagen Business School, have been trying to find out whether more women directors have led to de facto changes in the work of corporate boards. 

            They conducted a comprehensive study of 201 Norwegian companies with between 50 and 50,000 employees. 

            The ratio of women in the companies they examined varied from 0 to 66.7 per cent, with an average female rate of 12.8 per cent.

            This makes it possible to compare companies with a high ratio of women with companies where the suits still dominate. On average, the companies included in the study had just over six directors.

            Better at strategy

            The two researchers asked the managing directors of the 201 companies studied to assess their respective boards by means of a questionnaire prepared in the course of the research project “The Value-creating Board” at BI Norwegian School of Management.

            They found that boards with high female representation spend more time working on strategic control than boards with fewer women. 

            This includes work relating to management strategy, to how the organization performs its tasks and to health, environment and safety. These are areas that require high analytical and visionary skills.

            The researchers found no differences in the boards when it came to solving more operational, routine board work (budgets, following up accounts). These are tasks the corporate boards solve equally well, whether they have few or many women in their midst.

            Going for self-development

            The answers from the companies’ managing directors also show that boards with a high ratio of women attach greater weight to development activities in the board.

            An indication of this is that instructions for the board’s work are adopted to a greater extent and used as a tool. New directors are given a good introduction to the board. 

            Regular competence-building measures are an important area of commitment. Boards with a high female factor are also more liable to conduct regular board evaluations. 

            Huse and Nielsen have also found that a higher ratio of women directors contribute to reducing the conflict level. The advantage of this is that the board will be able to spend more time on important strategic tasks.

            Originally published on the BI Norwegian School of Management website