Ahead of Cambridge Judge Business School’s Wo+Men’s Leadership Conference, 7-11 June, a roundup of five recent Cambridge Judge studies on gender-related issues.
The Wo+Men’s Leadership Conference at Cambridge Judge Business School will be held 7-11 June, with keynote speakers Alison Loehnis, President, Luxury and Fashion, NET-A-PORTER, MR PORTER and THE OUTNET in conversation with Ruth Kennedy, Managing Director of Kennedy Dundas; and Tilly Franklin, Chief Investment Officer at the University of Cambridge.
The annual conference, run by Cambridge Judge’s Wo+Men’s Leadership Centre, will be online this year given the pandemic, and is entitled “Cambridge Women Can”. It will recognise the significant impact the pandemic has had on working women and will take a closer look at flexibility and the future of work; how to build resilience; creating actionable equity, diversity and inclusion agendas and how to shape a sustainable mindset.
In advance of the conference, here’s a roundup of five studies by Cambridge Judge faculty and other experts over the past year or so posted on our website:
1. Board diversity affects IPO pricing
How does board diversity affect the price of initial public offerings? Research co-authored by Professor Raghu Rau of Cambridge Judge found that firms with gender-diverse boards had a bigger first-day “pop” in their stock returns, reflecting institutional investor demand for diverse boards rather than higher profitability.
The study, which examined more than 1,400 IPOs during the period 2000-2018, follows a recent decision by Goldman Sachs to stop financing IPOs of companies in the US and Europe with only white male board members.
“We show that investors, in particular institutional investors, indeed appear to value gender-diverse IPOs more highly,” the study says. “IPOs with at least one woman on the board are significantly more underpriced than IPOs with all male boards.”
2. ‘Good deeds’ breed complacency on gender balance
Firms that boost female representation at the top often use such “organisational licencing” to become complacent in recruiting more women. That’s the conclusion of a study presented at the inaugural Professor Sucheta Nadkarni Research Seminar, named in honour of the former Director of the Wo+Men’s Leadership Centre, who sadly passed away in October 2019.
The study was presented by Dr Lionel Paolella of Cambridge Judge, who said that firms often perform a “good deed” at the top level but then don’t adequately address gender inequality at lower levels.
The study, which is based on the top 200 US law firms over a nine-year period, also finds that the presence of male leaders in diversity committees reduces this organisational licensing effect.
3. Group culture affects gender and leadership issues
Leaders adapt their behaviour based on their perceptions of the group culture and their followers’ attitudes, says a paper authored at Cambridge Judge which won an Academy of Management award for research that advances understanding of transnational gender and diversity issues.
The paper by faculty member Yeun Joon Kim and PhD candidate Yingyue Luan of Cambridge Judge goes beyond previous studies on gender and leadership to focus not only on the gender of a leader but also on the “confluence” of a leader, followers and their respective social contexts.
The research also examines how cultural “tightness” – a group’s shared perceptions of how strictly its norms are enforced – shapes attitudes toward gender stereotypes.
“We suggest that female leaders in tight groups are more likely than male leaders to perceive stronger negative attitudes toward stereotypically feminine leadership behaviour because members of a stigmatised group (for example, female leaders) tend to perceive a stronger identity threat than non-members,” says the paper.
“Our results further justify the necessity of having the equal proportion of men and women in a group and constantly checking whether organisational cultures signal stereotypical cues offering pressures to female leaders.”
4. The ‘prospective’ motherhood penalty
A study at Cambridge Judge looks at the “prospective motherhood penalty”, finding that women viewed as potential mothers are held back at work regardless of their actual motherhood status.
The discussion paper published by the Wo+Men’s Leadership Centre finds that women without children are perceived more negatively than men without children in areas including commitment, competence and motivation – with little statistical difference between women with children and without children. “The paper finds that the prospective motherhood penalty is a major issue afflicting women in the workplace at a time when more women are choosing not to have children or to have children at a later age,” says study co-author Dr Monique Boddington of Cambridge Judge. “This penalty is likely to have severe career ramifications on women in middle-level jobs and those with high potential to reach executive-level posts, so it provides a new explanation for the persistence of gender pay gaps across organisations.”
5. Gender balance boosts psychological safety
The complementary social roles played by men and women on top management teams boost psychological safety and help produce more balanced strategic decisions, says a study co-authored at Cambridge Judge. The paper rejects “the-more-(women)-the-better” approach in favour of a more nuanced explanation.
“We offer an alternative account to the prevalent female-focused theorisation of the positive strategic implications of TMT (top management team) gender diversity,” says the article whose co-authors include the late Professor Sucheta Nadkarni and Shi Tang, a PhD student at Cambridge Judge. The study based on four high-tech enterprises in China also concludes that benefits from TMT gender diversity are further enhanced when companies have little slack in their use of uncommitted resources, which often occurs in challenging times.