Women On Board: Family Firms And The Feminine Principle

Recently there has been an increased focus on the importance of including women in leadership positions, including on boards. But apart from the obvious reason of legal equality, why is a policy of mixed-gender board representation a potentially important business strategy?

Balancing Energy, Risk and Reputation

Studies show that especially in stressful environments, males tend to take more risks in life than females. In business, where bets often need to be hedged, female leadership—which tends to be slightly more risk-averse—can provide invaluable balance. When an organization is out of balance, it may act “out of ethics.” The damage this does to the company’s reputation, and the harm done to those affected by these actions takes serious effort to rectify.

Women directors are associated with less aggressive investment policies and business strategy in general, better acquisition decisions and improved firm performance overall. This stereotypical reluctance to rush in is partly why at least family firms incorporate more female directors and board members.

One can also argue that many workplace fiascos currently being addressed by organizations such as the #metoo movement, as well as the proliferation of “penned manifestos,” could have been avoided had those boards had more female members steering and guiding the organizations from above.

Feminine Principle

In this age of personal gender identification, many still think of the feminine principle as nurturing, guiding and embodying a less aggressive stance in general. The classic maternal approach utilizes both hard and soft power, and this maternal approach can be incredibly useful as a business strategy.

By bringing a more balanced dynamic to the workplace, organizations can benefit from strong direction in a caring manner, to build future-facing organizations where employees are encouraged to venture out into the unknown and make mistakes to help move the company forward.

Look North for Fair Play

Since 2008, Scandinavian countries such as Norway have been veritable fair play (and fair pay) pioneers by legally requiring 40% female board representation. Since then many European countries have followed suit, and today France has an even higher percentage of women serving on company boards. Ten years down the line, however, not much has changed as far as boosting female employees up the corporate ladder in general, nor have the regulations made a difference in narrowing the pay gap between male and female employees on lower rungs.

In the U.S. women hold less than 20% of S&P 500 companies’ board seats, possibly as a result of legal requirements concerning female board representation. One argument against legal requirements is the risk of becoming the “token” female: no one wants to be brought on board based on his or her gender rather than skills or experience.

Family Firms Lead

A study of 1,000 family firms in Sweden found that female leadership has far more positive impact on the performance of family firms versus non-family firms. One reason could be that families are more accustomed to female representation at the board level and therefore more comfortable having important decisions that rest with female decision makers.

Your Organization Is Your Family

Most people spend more time with their work families than their own, so perhaps it makes sense to start looking at an organization as a second family. By doing this, and structuring it in the same way, the female leadership on a board level might not only be approached from a reputation angle or quota level (legal or otherwise) but rather a business strategy to be embraced.

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