Sucheta Nadkarni.

Female representation in top management

5 November 2020

The article at a glance

Firms that boost female representation at the top often use such ‘organisational licencing’ to become complacent in recruiting more women, says study …

Firms that boost female representation at the top often use such ‘organisational licencing’ to become complacent in recruiting more women, says study presented at the inaugural Professor Sucheta Nadkarni Research Seminar.

The study was presented 13 October at a webinar by co-author Dr Lionel Paolella, University Lecturer in Strategy & Organisation at Cambridge Judge Business School, in honour of a co-author of the paper, Professor Sucheta Nadkarni of Cambridge Judge, the Director of the Business School’s Wo+Men’s Leadership Centre who sadly passed away in October 2019. The webinar was the inaugural event in the Wo+Men’s Leadership Centre Professor Sucheta Nadkarni Research Seminar Series.

Here’s an opportunity to see his presentation and read key findings:

Lionel Paolella.
Dr Lionel Paolella

Firms that increase female representation at top levels often use such a “good deed” as an organisational crutch to become complacent in addressing gender inequality at lower levels, says a study presented at the inaugural Professor Sucheta Nadkarni Research Seminar.

The study, which focuses on the top 200 US law firms over a nine-year period, finds that such “organisational licencing” reduces employment offers to women at lower levels and creates only an “illusion of fairness” that merely addresses pressure from external shareholders.

The study also finds that the presence of male leaders in organisation-wide diversity committees lessens such detrimental effects. “We demonstrate that the presence of male leaders on diversity committees reduces the organisational licensing effects of gender parity at the top on the recruitment of female employees at the lower levels,” says the study.

The research breaks new ground by moving beyond what the authors term a “female-centered lens” in prior studies toward a “more holistic organisation-level” approach.

“Our study lends an organisational explanation of a phenomenon not explained in existing research – how gender diversity in senior management positions results in unintended paradoxical consequences for female hiring at lower levels,” says the study co-authored at Cambridge Judge.

A stark chart in the study shows that in 2007 the average number of female partners at the top 200 US law firms was about 30 and the average number of hiring offers to female associates was about 15, while in 2015 the average number of female partners was about 40 and the average number of new hiring offers to female associates was about 10.

A 2017 report by McKinsey found that while US law firms have made concerted efforts to implement programmes to increase diversity, these efforts have not resulted in measurable “long-term benefits to recruitment” for women associates – so the report suggested that law firms need to “find ways to make diversity a firm-wide issue”.

The study is based on a longitudinal data set of the top 200 US law firms from 2007 to 2015, supplemented by interviews with 33 female and male lawyers ranging from senior partners to junior associates at sampled firms.

The research found that appointing women to top roles had a “significant” and “negative” effect on lower-level recruitment of women, Lionel told the webinar, in which he also emphasised the “virtuous role” that men can play on diversity committees and the importance that such committees meet on a very regular basis.

“It’s very important to bring this male majority on board,” Lionel said in response to webinar audience questions coordinated by Dr Jenny Chu, University Senior Lecturer in Accounting and Academic Director of the Wo+Men’s Leadership Centre at Cambridge Judge. He continued, “We hope our research has shifted the focus away from women at the top of organisations to the organisation itself.”

Lionel said that the lessons learned from the study on the negative effects of “organisational licensing” can be applied to many other aspects of diversity – be they “good deeds” in philanthropy or in protecting the environment, because organisations can become lax and allow unconscious bias to emerge in many areas.

At the webinar watched around the world including by Sucheta’s family and friends in India, the recipients of the Cambridge Judge-sponsored Strategic Management Society Sucheta Nadkarni Award for Outstanding Publication on Women Executive Leadership were announced: Raina A. Brands and Isabel Fernandez-Mateo of London Business School were honoured for their publication: “Leaning Out: How Negative Recruitment Experience Shape Women’s Decisions to Compete for Executive Roles”. The paper – entitled “A License to Tick-Off the Box: Female Representation in Top Management and Organizational Diversity Priority” – is co-authored by Sucheta Nadkarni and Lionel Paolella of Cambridge Judge Business School, and Priyanka Dwivedi of Mays Business School at Texas A&M University.

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5 November 2020.