Category Archives: Leadership

Leadership

Executive Presence: “Gravitas,” Communication…and Appearance?

Professional advancement requires demonstrated knowledge, skill, and competence, coupled with perceived “cultural fit,“collaboration,” and “executive presence.”

Sylvia Ann Hewlett

Sylvia Ann Hewlett

These requirements appear prone to subjective definition and biased judgments.
What is “executive presence”? How is it measured?

Sylvia Ann Hewlett, CEO of Center for Talent Innovation, conducted 18 focus groups and 60 interviews to investigate behavioral and attitudinal aspects of Executive Presence (EP).

Perceived Executive Presence includes three components:Executive Presence

Gravitas” – Authoritative Behavior

    • Confidence, composure,
    • Decisiveness,
    • Integrity,
    • Emotional Intelligence: Self-awareness, self-regulation, interpersonal skills,
    • Personal reputation,
    • Vision for leadership,

Communication

    • Speaking skills:  Voice tone, articulation, grammatical speech conveying competence,
    • Presence,” “bearing,” “charisma” including assertiveness, humour, humility,
    • Ability to sense audience engagement, emotion, interests,

Appearance

    • Grooming, posture,
    • Physical attractiveness, average body weight,
    • Professional attire.
      According to Hewlett’s interviewees, “Executive Presence” accounts for more than a quarter of factors that determine a next promotion.

Harrison Monarth

How can Executive Presence be developed?

 Harrison Monarth suggested that Executive Presence behaviours can be cultivated with Image Management tactics including:

-Maintaining a positive personal reputation to influence others’ favourable perceptions and willingness to collaborate,

-Effectively managing online “brand”,

-Gaining followers online and in the “real world,”

-Influencing and persuading others,

-Demonstrating “Emotional Intelligence” through self-awareness, awareness of others (empathic insight), and regulating one’s own emotions.

He focused less on appearance than Hewlett and Stanford Law School’s Deborah Rhode, who summarized extensive research on Halo Effect and “The Beauty Bias”.

Deborah Rhode

Rhode estimated that annual world-wide investment in appearance was close to $USD 200 billion in 2010.
She contended that bias based on appearance influences career and life outcomes and is:

  • Is prevalent,
  • Infringes on individuals’ fundamental rights,
  • Compromises merit principles,
  • Reinforces negative stereotypes,
  • Compounds disadvantages facing members of non-dominant races, classes, and gender.

Executive Presence is widely recognized as a prerequisite for leadership roles, yet its components remained loosely-defined until Hewlett’s investigation and Rhode’s human rights analysis.

-*Which elements seem most essential to Executive Presence?

See related posts

©Kathryn Welds

Costs of Workplace Incivility

Christine Pearson

A single incident of incivility in the workplace can result in significant operational costs, reported Christine Pearson of Thunderbird School of Global Management and Christine Porath of Georgetown University.

Additional consequences of workplace incivility include:

  • Decreased work effort due to disengagement,

    Christine Porath

    Christine Porath

  • Less time at work to reduce contact with offensive co-workers or managers,
  • Decreased work productivity due to ruminating about incivility incidents,
  • Less commitment to the organization,
  • Attrition.
Pier Massimo Forni

P.M. Forni

Other organizational symptoms include:

  • Increased customer complaints,
  • Accentuated cultural and communications barriers,
  • Reduced confidence in leadership,
  • Less adoption of changed organizational processes,
  • Reduced willingness to accept additional responsibility and make discretionary work efforts.

Workplace incivility behaviours were described as “rude and discourteous, displaying a lack of regard for others,” noted Pearson and Lynne Andersson, then of St. Joseph’s University.
“Uncivil” behaviors were enumerated in The Baltimore Workplace Civility Study by Johns Hopkins’ P.M. Forni and Daniel L. Buccino with David Stevens and Treva Stack of University of Baltimore:

  • Refusing to collaborate on a team project,
  • Shifting blame for an error to a co-worker,
  • Reading another’s mail,
  • Neglecting to say “please,” “thank you”,
  • Taking a co-worker’s food from the office refrigerator without asking.

Respondents classified more extreme unacceptable behaviors:

  • Pushing a co-worker during an argument,
  • Yelling at a co-worker,
  • Firing a subordinate during a disagreement,
  • Criticising a subordinate in public,
  • Using foul language in the workplace.

Gary Namie

Workplace bullying was included in Gary Namie’s Campaign Against Workplace Bullying.
He defined bullying as “the deliberate repeated, hurtful verbal mistreatment of a person (target) by a cruel perpetrator (bully).

His survey of more than 1300 respondents found that:

  • More than one-third of respondents observed bullying in the previous two years,
  • More than 80% of perpetrators were workplace supervisors,
  • Women bullied as frequently as men,
  • Women were targets of bullying 75% of the time,
  • Few bullies were punished, transferred, or terminated from jobs.

Costs of health-related symptoms experienced by bullying targets included:

  • Depression,
  • Sleep loss, anxiety, inability to concentrate, which reduced work productivity,
  • Post-Traumatic Stress Disorder (PTSD) among 31% of women and 21% of men,
  • Frequent rumination about past bullying, leading to inattention, poor concentration, and reduced productivity.

Choosing CivilityWidespread prevalence of workplace incivility was also reported by Forni, who suggested ways to improve workplace interactions and inclusion:

  • Assume that others have positive intentions,
  • Pay attention, listen,
  • Include all co-workers in workplace activities,
  • Acknowledge others,
  • Give praise when warranted,
  • Respect others’ opinions, time, space, indirect refusals,
  • Avoid asking personal questions,
  • Be selective in asking for favors,
  • Apologize when warranted,
  • Provide constructive suggestions for improvement instead of complaints,
  • Maintain personal grooming, health, and work environment,
  • Accept responsibility for undesired outcomes, if deserved.

More than 95% of respondents in The Baltimore Workplace Civility Study suggested, “Keep stress and fatigue at manageable levels,” a challenging goal for leaders who shape workplace cultures.

Organizational change recommendations include:

  • Institute a grievance process to investigate and address complaints of incivility,
  • Select prospective employees with effective interpersonal skills,
  • Provide a clearly-written policy on interpersonal conduct,
  • Adopt flexibility in scheduling, assignments, and work-life issues.

-*How do you handle workplace incivility when you observe or experience it?

©Kathryn Welds

Defining “Executive Presence”

Sylvia Ann Hewlett

Sylvia Ann Hewlett

Communication, “Gravitas”, and Appearance were frequently-cited attributes of Executive Presence in a study by Sylvia Ann Hewlett of the Center for Talent Innovation.

Gavin Dagley

More characteristics of executive presence were identified in interviews with 34 professionals, conducted by Perspex Consulting’s Gavin Dagley and Cadeyrn J. Gaskin, formerly of Deakin University.

Caderyn Gaskin

Five “executive presence” qualities were observable during initial contact:

  • Status and reputation, similar to “gravitas” discussed by Hewitt,
  • Physical appearance, mentioned by Hewitt,
  • Confidence,
  • Communication ability, included in Hewitt’s “executive presence” triad,
  • Interpersonal engagement skills.

Five additional presence features emerged during repeated contacts:

  • Interpersonal integrity,
  • Values-in-action,
  • Intellect and expertise,
  • Outcome delivery,
  • Use of coercive power.

These qualities combine in different ways to form four presence “archetypes”:

  • Positive presence, based on favorable impressions of confidence, communication, appearance, and engagement skills plus favorable evaluations of values, intellect, and expertise,
  • Unexpected presence, linked to unfavorable impressions of confidence plus favorable evaluations of intellect, expertise, and values,
  • Unsustainable presence combines favorable impressions of confidence, status, reputation, communication, and engagement skills plus unfavorable evaluations of values and integrity,
  • “Dark presence” is associated with unfavorable perceptions of engagement skills plus unfavorable evaluations of values, integrity, and coercive use of power.
Philippe De Backer

Philippe De Backer

Another typology of executive presence characteristics was identified by Sharon V. Voros and Bain’s Philippe de Backer.
They prioritized elements in order of importance for life outcomes:

  • Focus on long term strategic drivers,
  • Intellect,
  • Charisma, comprised of confidence, intensity, commitment, care, concern and interest in others,
  • Communication skills,
  • Enthusiasm for work,
  • Cultural fit with organisation and team,
  • Poise,
  • Appearance.
Fred Luthans

Fred Luthans

University of Nebraska’s Fred Luthans and Stuart Rosenkrantz with Richard M. Hodgetts of Florida International University investigated the relationship between “executive presence” and career “success.”
These researchers observed nearly 300 managers across levels at large and small mainstream organizations when leaders:

  • Communicated,
  • Engaged in “traditional management” activities, including planning, decision making, controlling,
  • Managed human resource issues.
Richard Hodgetts

Richard Hodgetts

Communication and interpersonal skills, coupled with intentional networking and political acumen enabled some managers to rapidly advance in their organizations.

These rapidly-advancing managers were identified as “successful” leaders because they achieved a higher organizational level compared with their organizational tenure.
In contrast, “effective” managers demonstrated greater managerial skill than “successful” managers, but were not promoted as quickly.

Effective” managers spent most time managing employees’ activities including:

  • Motivating and reinforcing desired behaviours,
  • Managing conflict,
  • Hiring,
  • Training and developing team members,
  • Communicating by exchanging information,
  • Processing paperwork.
Stuart Rosenkrantz

Stuart Rosenkrantz

Subordinates of “effective” managers reported more:

  • Job satisfaction,
  • Organizational commitment,
  • Performance quality,
  • Performance quantity.

Differences in advancement and subordinate reactions to “successful” and “effective” managers were related to differing managerial behaviors.

Fred Luthans-Effective ManagersSuccessful” managers spent little time in managerial activities, but invested more effort in networking, socializing, politicking, and interacting with outsiders.
Their networking activities were most strongly related to career advancement but weakly associated with “effectiveness.”

Few managers were both “successful” and “effective”:
Only about 10% leaders were among the top third of successful managers and effective managers.
This suggests that effective managers who support employee performance may not be advance as rapidly as managers who prioritize their own career over their employees’ careers.

Gender differences in gravitas, communication, and political acumen may explain why men more often are seen as possessing “executive presence.”

Women who aspire to organizational advancement benefit from cultivating both gravitas and proactive networking to complement communication and interpersonal skills.

-*Which behaviors and characteristics are essential to “Executive Presence?”

Related Posts

©Kathryn Welds

Creating Productive Thought Patterns

Albert Ellis

Albert Ellis

Leaders’ actions actions are influenced by unspoken self-talk.
Sometimes, these thoughts are self-critical and provoke anxiety.

Aaron Beck

Aaron Beck

Cognitive Behavior Therapy (CBT), developed by University of Pennsylvania’s Aaron Beck, provides a systematic way to notice and restructure “irrational self-talk.
Similar approaches were developed by Albert Ellis in Rational-Emotive Therapy (RET), and David Burns in his synthesis of CBT and RET.

David Burns

David Burns

Arizona State University’s Charles Manz and Chris Neck  translated these self-management processes to managerial development.
They outlined a Thought Self-Leadership Procedure as a five-step circular process:

Charles Manz

Charles Manz

1. Observe and record thoughts,

2. Analyze thoughts for potential errors in reasoning (jumping to conclusions, exaggeration),

3. Substitute alternate positive, realistic, plausible, acceptable thoughts,

4. Monitor personal reactions to these thoughts,

5. If more negative thoughts appear, continue to substitute the more productive thoughts.

Screenshot 2023-03-04 at 10.06.57

John Crimmins

John Crimmins

Other recommendations to manage thoughts about stressful situations were distilled by John Crimmins of Behaviour Institute in coaching people at work.

He suggested asking the following questions:

  • How do I know if this thought is true?
  • What evidence do I have to support this thought or belief?
  • How can I test my assumptions/beliefs to find out if they’re accurate?
  • What would a trusted friend say about these thoughts?
  • How is this thought helpful now?
  • What other ways that I can think about this situation?
  • What would a friend say when I blame myself in this situation?
  • What would I say to a friend who was in this situation?
  • What would a friend say to me when I take this situation personally?
  • How can I consider this situation on a continuum rather than in either-or terms?

-*What practices do you use to develop and apply productive thought patterns?

©Kathryn Welds

Followers’ Role in Enabling Bad Leaders

Barbara Kellerman

Barbara Kellerman

Seven types of ineffective and unethical leaders are enabled by their followers, according to Harvard’s Barbara Kellerman.

She categorized bad leaders as:

Incompetent – Failing to create positive change,

Rigid – Not adapting to new ideas, conditions,

Intemperate – Lacking self-control,

Callous – Uncaring and unkind, discounting needs and wishes of group members, especially subordinates,

Corrupt – Advancing self-interest ahead of public interest, through “lying, cheating, and stealing”,

Insular – Disregarding health and welfare of outsiders,

Evil – Committing atrocities, using pain as an instrument of power, exerting physical, psychological harm.

Kellerman’s earlier work focused on Hitler’s leadership, and asserted that his power wouldn’t have existed without complaint followership.

John Darley

John Darley

She noted that bystanders who do not speak up enable bad leaders to continue their practices.

“Bystander Apathy”  was documented more than forty years ago by NYU’s John Darley and Bibb Latané of Columbia.

Bibb Latane

Bibb Latane

Given status differentials between leaders and subordinates, followers can break out of complacent observership only if organizational structures enable them to call attention to unethical leadership practices.

Kellerman suggested mitigation practices for various organizational structures in a videotaped lecture, including developing support coalitions and considering external opportunities for employment outside the organisation.

-*What “bad leader” roles have you observed in your organization?

-*What seem to be effective ways to interact with a “bad” organizational leader?

©Kathryn Welds

“High-Commitment” Workplaces Enhance Creative Problem Solving, Innovation

Richard E. Walton

Richard E. Walton

Some organizations have implemented suggestions by  Harvard’s Richard E. Walton to cultivate a  “high-commitment work systems (HCWS)” as a “lever” to positively influence employee productivity, retention, and innovation.

High-commitment employee benefits are designed to elicit employees’ reciprocal commitment and intrinsic motivation to support the organization’s objectives.
These programs include:

  • Employee participation initiatives,
  • Team rewards,
  • Profit sharing,
  • Career development training,
  • Internal transfer opportunities,
  • Internal advancement opportunities, with preference over external candidates,
  • Employment ”security.”
Song Chang

Song Chang

Organizations with these programs, measured by High Commitment Work System Scale, had employees who provided more innovative solutions to complex tasks in a study of more than 50 technology firms in China by Song Chang of The Chinese University of Hong Kong, with Nanjing University’s Liangding Jia and Yahua Cai, and Hong Kong University of Science and Technology’s Riki Takeuchi.

Zhixing Xiao

Zhixing Xiao

“High-commitment work systems (HCWS)” can occur in organizations with varying approaches to human capital management, described by China Europe International Business School’s Zhixing Xiao and Anne S. Tsui of Arizona State University:

  • Anne Tsui

    Anne Tsui

    Mutual-investment (or organization-focused) strategies combine:
    Economic exchanges with
    Social exchanges including implied trust and reciprocity leading to
    Expectations of employment security,

David Walsh

David Walsh

Although this job-focused approach does not imply trust or reciprocity, many contract employers offer employee benefits similar to those in “high-commitment” workplaces.

Joshua Schwartz

Joshua Schwartz

This contrast between employers’ implied social contract by offering high-commitment benefits with at-will employment may appear incongruous to employees.
The result may be confusion, cynicism or disengagement.

David Walsh-Joshua Schwartz At Will Exceptions MapHigh-commitment benefit programs can enable “creative situations,” where individual motivation can contribute to commercial innovation.

Teresa Amabile

Teresa Amabile

Organizations that establish creative work situations typically offer some high-commitment employee programs, according to Harvard’s Teresa Amabile:

  • Job rotation,
  • Training to increase subject matter expertise,
  • Job autonomy,
  • Working in teams to solve problems and deliver products,
  • Participative management.

Despite not guaranteeing employment tenure, these programs were associated with:

  • Egalitarian culture,
  • High trust,
  • Support for disrupting status quo.

Song Chang 2High-commitment employee programs can lead to increased innovation and related commercial opportunities.

However, organizations with at-will employment practices and high-commitment benefits can benefit from clearly communicating the limits of their commitments to avoid adverse employee reactions.

-*What are most effective ways to integrate coexisting at-will employment policies with “high-commitment work systems”?


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©Kathryn Welds

Leader Self-Efficacy Beliefs Determine Impact of Challenging Work Assignments

Stephen Courtright

Stephen Courtright

“High potential” employees often receive “stretch assignments” to expand their organizational knowledge, skills, and contacts.

Amy Colbert

Amy Colbert

Personal leadership self-efficacy (LSE) expectations about ability to deliver successful outcomes determine the actual results, reported Texas A&M’s Stephen H. Courtright, Amy E. Colbert of University of Iowa, and Daejeong Choi of University of Melbourne in their study of more than 150 managers and 600 directors at a Fortune 500 financial services company.

Daejeong Choi

Daejeong Choi

Individuals develop self efficacy, according to Stanford’s Albert Bandura, in response to:

  • Personal accomplishments and mastery,
  • Observing others’ behaviors, experiences, and outcomes,
  • Corrective feedback from others via coaching and mentoring,
  • Mood and physiological factors.
Albert Bandura

Albert Bandura

Bandura proposed that people’s expectations about their personal efficacy determines whether they:

  • Use coping behavior when encountering difficulties,
  • Apply exceptional effort in meeting challenges,
  • Persist for long periods when encountering obstacles.

These behaviors lead to the “virtuous cycle” of increased self-efficacy beliefs.

Laura Paglis Dwyer

Laura Paglis Dwyer

A measure of leadership self-efficacy (LSE), developed by University of Evansville’s Laura L. Paglis Dwyer and Stephen G. Green of Purdue University, evaluates a leader’s skill in:

  • Direction-setting,
  • Gaining followers’ commitment,
  • Overcoming obstacles to change.
Sean Hanna

Sean Hanna

Two additional Leader Self Efficacy characteristics were proposed by United States Military Academy’s Sean T. Hannah with Bruce Avolio, Fred Luthans, and Peter D. Harms of University of Nebraska:

  • Agency,” characterized by intentionally initiating action and exerting positive influence,
  • Confidence.
Jesus Tanguma

Jesus Tanguma

Women demonstrated significantly lower leadership self-efficacy beliefs than men in research by University of Houston’s Michael J. McCormick, Jesús Tanguma
, and Anita Sohn López-Forment.

However, these lower leadership self-efficacy beliefs can be modified with training, coaching, mentoring, and cognitive restructuring practice.

Courtright’s team reinforced that beliefs result from previous experiences can determine future outcomes, suggesting the importance of monitoring and managing these self-efficacy beliefs.

-*How do you maintain robust Leadership Self-Efficacy expectations even after disappointments and setbacks?

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©Kathryn Welds

Anxiety Linked to Risk of Behaving Unethically

Sreedhari Desai

Sreedhari Desai

Anxious people were more likely to act with self-interested unethical behavior in studies by University of North Carolina’s Sreedhari Desai and Maryam Kouchaki of Northwestern.

Maryam Kouchaki

Maryam Kou

Anxiety was also associated with increased threat perception and decreased concern about personal unethical actions in simulated subordinate–supervisor pairs.

Desai noted that “individuals who feel anxious and threatened can take on self-defensive behaviors and focus narrowly on their own basic needs and self-interest.
This can cause them to be less mindful of principles that guide ethical and moral reasoning – and make them rationalize their own actions as acceptable
.”

Charles Carver

Charles Carver

Engaging in unethical behaviors may offer more options and greater control over outcomes, found University of Miami’s Charles Carver and Michael Scheier of Carnegie Mellon.
Unethical behavior was also associated with feelings of greater autonomy and influence, particularly in ambiguous situations, according to Ohio State’s  Roy Lewicki.

Michael Scheier

Michael Scheier

People who violate ethical norms can experience a cheater’s high‘ instead of guilt, found University of Washington’s Nicole E. Ruedy and Celia Moore of London Business School.

Roy Lewicki

Roy Lewicki

Cheaters in Ruedy’s research reported emotional uplift and self-satisfaction instead of guilt, and Paul Ekman of University of California, San Francisco referred to this exuberance among some cheaters as “duping delight.”

Nicole Ruedy

Nicole Ruedy

In Ruedy’s studies, nearly 180 people completed a four-minute anagram task to earn $1 for every correctly unscrambled word.
Participants then rated current feelings from positive to negative, both before and after the task.

Celia Moore

Celia Moore

Volunteers’ actual answers on the task were compared from imprints between their answer sheets to determine which participants reported inaccurate results.

More than 40% of these volunteers wrote in additional answers to increase their earnings, and reported significantly positive feelings after cheating on the task.

Even when Ruedy’s team told volunteers that researchers knew participants may be providing inaccurate reports in an insoluble anagram task, more than half the participants reported implausibly high scores.

Cheaters had higher levels of positive affect even when confronted with the team’s awareness of their potential deceit.
They also showed higher levels of self-satisfaction and feeling clever, capable, accomplished, satisfied, and superior.

Earning more money didn’t add to the “cheater’s high,” suggesting a top threshold for positive feelings associated with cheating.

Maurice Schweitzer

Maurice Schweitzer

These findings suggest that organizational leaders can increase employee quality-of-life and diminish unethical workplace behaviors by clarifying roles, which reduces anxiety.

Leaders also can reduce employees’ anxiety by:

Paul Ekman

Paul Ekman:

  • Setting realistic expectations for employee workload,
  • Adopting Results Only Work Environment (ROWE) and flex time,
  • Emphasizing the value of experimentation, flexibility, and innovation.

-*How have you seen high-anxiety workplaces affect employees’ ethical judgment?

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©Kathryn Welds

“Evolved” Leaders in an Era of Self-Interested Leadership

Jim Collins

Jim Collins

Organizations that are “built to last” are guided by “Level 5 Executives,” argued Jim Collins in Good to Great: Why Some Companies Make the Leap… and Others Don’t.

This style of leadership requires both personal humility and personal will, a combination not favored in the current US national leadership.

Collins proposed a developmental leadership hierarchy including:

  • Level 1 Highly Capable Individual, who applies knowledge, skills, abilities, and commitment to achieve team goal,
  • Level 2Contributing Team Member, who contributes to team goal achievement through effective collaboration,
  • Level 3Capable Manager, who sets plans and organizes others to achieve goals,
  • Level 4Effective Executive, who inspires others to act toward the shared vision,
  • Level 5:  Level 5 Executive combines personal will to achieve the organizational improvement goal, tempered with personal humility.

Modesto Maidique

Modesto Maidique

Drawing on developmental psychology theories by Jean Piaget as well as Harvard’s Lawrence Kohlberg, and Robert Kegan, Florida International University’s former President, Modesto A. Maidique proposed a six-level Purpose-Driven Model of Leadership

Jean Piaget

Jean Piaget

Leadership is service to others, organizations, and ideals, and follows a related developmental path:

  • Level One: Sociopath, who serves no one, exhibits low empathy, and destroys value and undermines others.
    Well-known examples are Muammar Gaddafi, Adolf Hitler, and Saddam Hussein.

Lawrence Kohlberg

Lawrence Kohlberg

  • Level Two: Opportunist, who serves himself or herself, often at others’ expense by focusing on “What’s in it for me?
    Examples include Bernie Madoff and Jeffrey Skilling.
  • Level Three: Chameleon, who “flip-flop” and cater to as many people as possible.
    Examples include Senator John Kerry, former Florida governor Charlie Crist, and former Massachusetts governor Mitt Romney.

Robert Kegan

Robert Kegan

    • Level Four: Achiever, who often achieves business goals through energetic focus.

      Peter Drucker

      Peter Drucker

      Peter Drucker characterized this leader as “monomaniac with a mission,” driving toward a goal without fully considering the broader mission.
      Examples include former H-P CEO Mark Hurd.

    • Level Five: Builder, who seeks to build an institution, not just to achieve a goal.
      Examples include IBM’s Tom Watson Jr., GM’s Alfred P. Sloan, and Harpo’s Oprah Winfrey.
      They have a clear vision, energize others, manage for the long term, and not swayed by short-term profit or stock market valuations.
  • Level Six: Transcendent, who focus on broader social benefit beyond their personal affiliations.
    Purpose-Driven Model of Leadership
    Examples include Nelson Mandela, Martin Luther King Jr., and the Dalai Lama.

These frameworks provide a structure to evaluate the words and actions of current political and business leaders, and suggest potential leadership vulnerabilities.

-*What level of leader do you observe in the highest levels of your work organization?
-*What practices are you implementing to develop your next level of leadership skill

©Kathryn Welds

Women Board Members + Strong Shareholder Protections = Higher Financial Performance

Kris Byron

Kris Byron

The relationship between women on corporate Boards of Directors and company positive financial results is mixed, according to Syracuse University’s Kris Byron and Corinne Post of Lehigh University.

Corinne Post

Corinne Post

They conducted a meta-analysis of 140 existing studies and found that women on corporate boards was related to positive financial outcomes in countries with stronger shareholder protections.

Richard Gentry

Companies with women on Boards and subject to rigorous shareholder protections reported higher accounting returns or firm profitability, noted University of Mississippi’s Richard Gentry and Wei Shen of Arizona State University.

Wei Shen

Women on Boards of Directors provide “diversity of thought and experience” and tolerate less financial risk.
As a result, they made stronger efforts to monitor the firms and to ensure strategy execution, leading to superior financial results,according to Byron and Post.

Kathleen Eisenhardt

Kathleen Eisenhardt

The team drew on Agency Theory, proposed by Stanford’s Kathleen Eisenhardt, suggesting that Boards of Directors are “information systems” used by key stakeholders to verify organizational behavior.

Amy Hillman

Amy Hillman

Directors’ individual cognitive frames, derived from their diverse values and experiences, influence these systems, according to  Arizona State’s Amy Hillman and Thomas Dalziel of University of Cincinnati.

However, diverse cognitive frames yield more favorable organizational outcomes only when teams “engage in mutual and collective interaction [and] share information, resources, and decisions.

This means that women Board members affect group decision-making and financial performance when other Board members are willing to consider their diverse perspectives and experiences.

Thomas Dalziel

Thomas Dalziel

Strong shareholder protections provide “an information-processing stimulus that motivates (Boards) to leverage the decision-making resources (i.e., knowledge, experience and values) that women bring,” asserted Byron and Post.
They concluded that strong financial outcomes occur in companies with women on their Boards of Directors in countries with strong shareholder protections.

Byron and Post’s analysis illustrates that diverse perspectives provide benefit only when they are solicited and considered in a context of regulatory oversight.

-*When have you observed diverse perspectives associated with increased profitability and performance?

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©Kathryn Welds