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2009 UC Davis Census

he 2009 census shows that women occupy a small minority of the board and top management positions in California’s400 largest corporations. There is variation in the representation of women on the boards and in top management teamsacross

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rms, and this variation can be attributed partly to differences in the primary industries, headquarters locationsand sizes of

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rms. Firms in the high-tech industries and located in Silicon Valley tend to include fewer women on theboard and in top management. The largest

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rms tend to have more women directors and managers. These results areconsistent with the

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ndings from previous years.There is little variation, though, in the representation of women in leadership positions in California’s 400 largest corporations over time. For the past three years, the percentage of women on the boards of California’s largest

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rms hashovered at about slightly less than 10%. The proportion of women in the top management teams of California’s largest

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rms has

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uctuated around slightly less than 12%. Furthermore, this year’s

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ndings showed little variation in therepresentation of women on the board and in top management within

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rms over time. Approximately 80% of the 297

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rms included in this and last year’s census had the same number of women directors in 2008 and 2009. Approximately 85% of the

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rms included in this and last year’s census had the same number of women executives. Although 36

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rmshad more women on their boards this year than last year, 24

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rms had fewer women on their boards. Additionally, while20

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rms had more women in their top management teams this year than last year, 26 had fewer. This stability wasre

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ected in the correlation between the representation of women in 2008 and 2009. The correlation between thenumbers of women directors in the two years was .90 (where a correlation of 1.0 represents a perfect association). Thecorrelation between the numbers of women executives across the two years was .85.

Remaining Questions

The data reported in this and previous years’ censuses indicate women occupy a small minority of the board and topmanagement positions in California’s largest

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rms. They do not, though, help us understand why this is the case. In alllikelihood, it is not because very few women enter the managerial ranks. Women garnered more than 20% of thebusiness and management master’s degrees as early as 1980, and their share of such degrees has increased steadily since then, reaching 40% in recent years (Business School Data Trends and 2009 List of Accredited Schools, AACSBInternational). Are women managers “eligible” to be promoted into top management and placed on the board of large

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rms advanced at a lower rate than men? That is, are women screened out of the competition for the board and topmanagement at the highest levels of the organization? If not, are women added to the pool of managers eligible to bepromoted into top management and placed on the board at a lower rate than men? That is, are women screened out of the competition for advancement to the board and top management at lower levels in the organization?If women are screened out of the competition for the board and top management, either early or late in their careers, what mechanisms constitute such screening? Is there garden-variety bias against women simply based on gender? Or are there more subtle forms of bias? For example, are women provided fewer opportunities to tackle dif

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cult assignmentsand thus demonstrate their capabilities? If so, is this because women are perceived to be unquali

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ed for such assign-ments? If this is true, is it because women occupy less central positions in social networks where reputations for competence are built? There is a large amount of research on the factors that determine the advancement of women at lower levels of organizations, both private and public. But there is surprisingly little research on the factors that might impact advancement to the highest levels of business. Clearly, there is much we do not know about the factors that might explain our results. Also important, these data do not tell us about the consequences of the small representation of women on the boards andin the top management teams of California’s largest

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rms. We conclude our report with a brief consideration of this topicand some preliminary evidence of our own.

CONCLUSION

2009 UC Davis Census

Are Firms Led by Women Greener?

Several studies have examined the relationship between the inclusion of women in top management and the board andcorporate

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nancial performance. The results of these studies suggest that

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rms that have women top managers anddirectors exhibit better

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nancial performance than

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rms that do not. Yet, it is not clear why

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rms that have womenleaders might exhibit higher performance than those that lack women leaders. Studies of individual investors, whichshow that women are less susceptible to overcon

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dence bias and thus less likely to pursue risky stock trading strategies,suggest one possible reason. Firms run by women might be less likely to pursue high-risk and low-return corporatestrategies. Future research should examine this possibility.Both academicians and practitioners, however, increasingly recognize that

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rm performance has a social dimension as well as a

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nancial one. Firms vary in the extent to which their behavior is legal, ethical and socially responsible.Researchers have begun to examine the factors that regulate corporate social performance. We think

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rms that include women among their top managers and directors may exhibit superior social performance compared to those runexclusively by men. Academicians who study ethical decision making have conducted experiments indicating that women are more likely than men to favor ethical and socially responsible courses of action.For this reason, we think that researchers should also examine the possible impact of women’s participation in topmanagement and on the board on the one hand and corporate social performance on the other. We have used this year’s census data to conduct a very preliminary study along these lines. Our

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ndings focus on one dimension of corporate social performance, namely, the extent to which

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rms pursue environmentally sustainable practices. A recent survey of business technology purchasers by Hansa|GCR, a marketing research and advisory

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rm (GreenTECHpulse ’08 www.hansagcr.com), found that women are more likely than men to favor ecologically sustainable busi-ness practices. If this re

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ects a general tendency, then

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rms run by women should be run in a more ecologically sustainable fashion.To evaluate this hypothesis, we drew on a report prepared by KLD Research & Analytics, Inc. and

Newsweek

Magazine (Green Rankings: The 2009 List http://greenrankings.newsweek.com), which ranked the largest 500 U.S.

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rms on the basis of the extent to which they pursue environmentally friendly policies. The highest ranked

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rm, Hewlett-Packard, was assigned the rank of 1. The lowest ranked

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rm, Peabody Energy, was assigned the rank of 500. Sixty-twoof California’s largest 400

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rms in 2009 were included in KLD’s sample of the largest 500 U.S.

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rms. We grouped these62

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rms into four categories that differed in the extent to which they incorporated women on their boards and in their top management teams: 1)

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rms with no women executives or directors, 2)

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rms with at least one womandirector but no women executives, 3)

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rms with at least one woman executive but no women directors, and 4)

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rms withat least one woman director and at least one woman executive. Then, we conducted two analyses that examined thestatistical relationship between the extent to which those

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rms incorporated women on their boards and topmanagement teams and their KLD ranking.In the

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rst analysis, we simply tabulated the average KLD rank for the

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rms in the four women leadership categories.The results of this analysis indicate that the incorporation of women in top management and the board was associated with the pursuit of ecologically sustainable policies. Firms that had no women directors or executives had the poorest environmental performance (average rank = 399). Firms that had both women managers and directors had the best environmental performance (average rank = 186). Firms that had at least one women director (but no womenexecutives) and

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rms that had at least one women executive (but no women directors) had environmental records inbetween these two extremes (241 and 208, respectively). These differences seem substantively signi

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cant, as the

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rmsthat had no women managers and directors had environmental performance scores that were on average more than200 points lower than

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rms that had both women managers and directors. But it is not clear whether or not thosedifferences are statistically signi

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cant and whether or not they are due to other factors that must be controlled.