Does the representation of women in

management have an impact on the

performance of a firm?
Introduction
Background
Information/
content

The List of Women CEOs of the Fortune 500,

updated as of October 16, 2015.
Women currently hold 4.4 percent of Fortune
500 CEO roles.
They
are
not
evenly
distributed; the top Fortune 100 companies
have eight female CEOs (8%), while the
remaining Fortune 500 companies have 14
female CEOs (3.5%).
In
the
commercial
economy,
female
entrepreneurs and executives are rising
rapidly.
It has raised community's attention that
female executives are strongly rising all over
the world.
An increasing number of scholars do
researches on the relationship between female
executives and corporate performance.
Literature review

There are a number of arguments in favor

(A panel study of
of diversity of board members to be found
2,500
Danish
in the previous literature (Bantel and
firms)
Jackson, 1989) and (Murray, 1989). Carter
et al., 2003 list five positive arguments
from a business case perspective and
also discuss management diversity in a
principal agent framework.

Predictions from the previous empirical

evidence are ambiguous. Most of the
empirical studies have been based on US
data, and most of the studies include only
the largest firms. Shrader et al., 1997
analyse the 200 largest US firms and they
are unable to find any significantly positive
relationship between the percentage of
female
board
members
and
firm
performance (measured by return on
assets, ROA, and return on equity, ROE).
They even find significantly negative

Aims

relations in some cases.

Kochan et al., 2003 also find no positive

relations between gender diversity in
management and firm performance for US
companies.

Contrary to these findings, Catalyst, 2004

and Adler, 2001 find positive correlations
between female-friendly US Fortune 500
firms and the performance of these firms.

Du Rietz and Henrekson, 2000 analyse

firm performance and women on boards
for a sample of Swedish firms.

A recent Norwegian study by Bo hren and

Stro m, 2005 finds a significantly negative
relationship between gender diversity
(proportion of women among board of
directors)
and
firm
performance
(measured by Tobins Q) in Norwegian
listed non-financial firms observed during
the period 1989-2002.
This paper attempt to review the literature
about the studies of the relationship between
women
executives
and
corporate
performance. And it is divided both in theory
and empirical study to sort out. Then,
prospecting for future research research.

Main body
Theoretical analyses
Table1 classify the related theories in 3 levels, they are individual,
team and enterprise separately. Comparing different perspectives of
content of theories and explaining the role of female executives.
Table 1. Comparison of different theoretical perspectives
Level
Theory
Core content
Explain the role of
Female executives
Individua Human
In growth of
Female executive has
l
capital
economic, the
its own unique human
theory
effect of Human
capital different from
capital is greater
male executives, which
than Material
may contribute to
capital.
business performance.
The Economic
efficiency of invest
in Human capital
is larger than

Feminist
theory

Team

Upper
echelons
theory

Social
cognitive
theory
Enterpris
e

Resource
depende
nce
theory

Material capital.
While education is
a main means to
enhance Human
capital.
Women should get
equal
opportunities and
rights with men in
the perspectives
of receiving higher
education, voting
right in elections,
accessing equal
wages, etc.
TMT demographic
characteristics
affect the
strategic choice
effectively, thus
affecting business
performance.

Mostly, women are

gave the responsibility
for parenting and
taking care of family.
Female executives are
weaker than male
executives in business
skills which create
negative impact on
business performance.
As a part of TMT,
female executive
demographic
characteristics affect
the strategic choice
effectively as well, thus
affecting business
performance.
The minorities
Women belong to
tend to submit to
minorities in senior
the majorities.
executive team;
therefor, they may not
play an active role.
Every
Female executives are
organizations have able to provide a
to get specific
variety of perspectives
resources from the and methods to solve
open environment the problems for
or exchange
management
resources with the decisions, matching
environment to
with diverse customers
survive and
and employees, which
develop.
can provide more
internal supports and
external resources.

Empirical study
Table2 summarize the main results of the empirical study in
relationship between female executives and performance of firms.
According to different effects that female executives affect on firm
performance, it is divided in three types, they are direct effect,
adjusted by situation factors and medium effect.
Table 2. the summary of empirical study results

Type

Authors

Year

Countr
y
Denma
rk

Dire Positive
ct
effect
effec
t

Smith et
al.

2006

Joy et al.

2007

USA

Negativ Alowaiha
e effect n

2004

Kuwait

No
Carter
obvious
effect

2010

USA

Adjusted by
situation
factors

Chirwat

2008

Malawi

Medium
effect.

Davis et
al.

2010

USA

Conclusion
1. Theoretical research prospect
2. Empirical research prospect

Result
The higher the degree
of women executives
better the
performance.
The higher the
proportion of female
directors the higher
stock returns
The performance of
business run by
women is lower than
male-run.
There is no causal
relationship between
board diversity and
financial performance.
The profit margin is no
related to the gender
of business owners for
some enterprises, but
related in other
enterprises.
Women behave
stronger Marketoriented capability
than men.