How Women Directors Influence Corporate Governance and Firm Dissertation

How Women Directors Influence Corporate Governance and Firm Performance - Dissertation Example Women have been shown to have a positive influence on a board, from aspects of participation such as attendance and dutiful diligence, to higher rates of pay for directors because of observable increases in performance which denote higher rates of return. The female presence on a corporate board provides a variety of advantages to the overall performance of a firm. Male Domination in the Board Room According to Gomez and Moore the statistics of female representation on corporate boards â€Å"show a disproportionate representation of women on boards in relation to their roles in society as consumers and employees†. According to Sparrow, only 15% of the board members in the United States are women, with only 1% being CEOs. In comparison, Sweden has 23%, Norway has 29%, Finland 20%, and Denmark 18%, because of Scandinavian policies that are encouraging the expansion of roles for women at the corporate level. However, in other European companies there is a lesser representation than in the United States. However, the problem with the statistics is that it does not reflect the number of female board members who are no more than a ‘trophy’ member, who holds several positions on the boards of multiple companies, decreasing the actual percentage of women who hold these positions. According to Reeves â€Å"Women’s lack of representation on boards is signific ant because boards make high level policy decisions that affect large numbers of people, including shareholders, employees, and ultimately consumers† (19). When women are represented on boards, there seems to be a ripple effect as more higher level management positions are then held by women within an organization. According to Reeves, the increases in CEO’s that are women have gone from nine in 2006, ten in 2007, twelve in 2008, and 13 in 2009, so the power balance is shifting, but by 2009, that number of 13 still only represented 2.6% of all corporate CEO’s. Reeves reports that while the average corporation has 21.8 corporate officers, only 3.6 of these positions are held by women. In 2006, 75% of the companies on the Fortune 500 had no women in top-earning positions within the corporate structure. An example to the social deficit that this creates can be seen where â€Å"women are more involved than men in the healthcare decisions for themselves and for their families†¦(however) more than one third of the world’s top 500 healthcare and pharmaceutical companies have no women on their corporate boards† (20). According to Peterson and Philpot, the professional backgrounds of board members on corporate boards shows that women are just as qualified in experience and background as are the men, but that they serve less frequently on executive committees than do men. Peterson and Philpot also find that gender is related to the way in which members are assigned to boards, and that the resource dependent theory provides for the phenomenon of women serving on more human and socially oriented boards, with men providing more representation on financial and budgetary committees. They suggest that there is â€Å"some relationship between committee assignment, gender, and the resource dependence role of directors† (193). Using the theory put forth by Nussbaum, the capabilities based approach, the nature of female representation should not be considered by the nature of gender but