Women in senior leadership roles have managed to contribute to a better society, say researchers at Harvard Business School (HBS) and Catalyst, a global research firm. A diverse boardroom leads to more effective CSR practices and governance at a company.
The study, entitled ‘Gender and corporate social responsibility: it’s a matter of sustainability,’ reveals that women who have managed to reach the top echelons at companies are better CSR practitioners. Catalyst’s research shows that, on average, such companies also financially outperform those with fewer women in senior leadership roles or in the boardroom.
CSR is more than profit. In the wake of the financial crisis and corporate scandals, more and more businesses have realised that socially responsible initiatives translate into sound business strategies. Many companies are trying to push better CSR practices to regain their reputation as ethical corporate citizens; and industry observers have criticised companies like MF Global, Lehman Brothers, Enron, Worldcom and Tyco for having few or no women on their boards.
The report found that companies with more women on their boards and as corporate officers brought a diversity of perspectives and fairness to distribution of company funds. Female executives who highlight gender issues in CSR strategies often position their organisations for sustained growth — a payoff that extends from the company to communities and to broader society, Catalyst says. There is also a drastic increase in charitable contributions and a stronger commitment to CSR initiatives once women are involved in the decision-making process.
These were some of the key findings of the study:
(i) In 2007 the average donations of companies with three or more women directors were 28 times higher than those of companies with no women directors.
(ii) Between 1997 and 2007 firms with few (more than three) women in senior leadership positions donated more to philanthropic causes, with each additional woman director representing an increase of $2.3 million in charitable giving.
(iii) Companies with 25 per cent or more women corporate officers in 2007 made annual contributions to such causes 13 times higher than those with no female corporate officers.
(iv) Women on boards made significant contributions to their firms’ overall commitment to the community. Each percentage point increase in the share of corporate officers who were women was tied to a $5.7 million dollar increase in the amount of money allocated to philanthropy.
Being a socially responsible firm may seem like a challenge in today’s environment, but having more women on the board generally improves a company’s reputation for good CSR practice, which in turn drives better business results.
[Article by Aarti Maharaj, Corporate Secretary]