Airport president

Gender-diverse boards produce more innovation

In Canada, women occupy only six per cent of board seats
Friday, February 7, 2020

Companies with more women on their boards are more innovative, efficient and successful, new research has found.

study from the UBC Sauder School of Business examined the makeup of boards across 12,244 firms in 45 countries. Researchers looked at the companies’ level of innovation using measures such as their number of patents, the novelty of their patents and the cost efficiency of that innovation.

They found that firms with more women on their boards produced a greater number of patents — and more groundbreaking ones — and achieved that innovation the most efficiently. Because innovation is the primary engine behind corporate growth, the findings show that greater board diversity can significantly bolster companies’ chances at success.

“Women tend to be more cautious, long-term oriented, and more community-driven, while men might be more driven by reputation, wealth and personal success,” said UBC Sauder professor Kai Li, who co-authored the study with fellow UBC Sauder professor Dale Griffin and Ting Xu from the University of Virginia’s Darden School of Business.

France and Norway, as well as the U.S. State of California, have already legislated quotas for women on boards of publicly traded companies. The country with the highest proportion of women on corporate boards was Norway, with women filling 27 per cent of board positions.

Yet gender diversity in particular, and diversity more generally, is seriously lacking in Canada where women occupied just six per cent of board seats compared to the worldwide average being eight per cent.

“The balancing of women on the board also helps the entire corporation rein in their risk-taking, be more patient and engage in more novel, impactful innovation for the long run,” said Li. “And you get more bang for your buck, because for the same expenditure, you generate more patents.”

Li emphasizes that the study isn’t saying women are inherently better than men; rather, a range of backgrounds, perspectives and approaches is what makes the most business sense.

“If everyone on a board looks like you, thinks like you and talks like you, it leads to one-dimensional thinking, so any dimension of diversity should be cherished, appreciated and encouraged,” said Li. “The point is not to focus on whether one gender is better than another. It’s the mixture that counts.”

Leave a Reply

Your email address will not be published. Required fields are marked *