Henrik Cronqvist from the University of Miami and Frank Yu from the China Europe International Business School are the authors of a unique and interesting research recently published by Harvard Business Review (HBR), one of the leading academic journals regarding economics and management.
Cronqvist and Yu have analysed the 500 most important American companies (those of the S&P 500, which is the most significant stock index of the US market, developed by Standard & Poor’s) regarding the Corporate Social Responsibility (CSR), comparing their behaviour with details of the children of the CEOs of these companies. Taking a step back, Corporate Social Responsibility is that branch of management that studies and implements a corporate behaviour that is socially responsible, or that pays attention to ethical issues such as the respect – and welfare – of the environment and of the people.
What emerged from the study is that when a CEO has at least one female daughter, the company results to have a score of 11.9% above average with regards to the measures of CSR activities, and that at the same time invests 13.4% more of its net profit than other companies in plans regarding social responsibility. This data is extremely significant in that, for the majority of companies, having an ethical and socially responsible behaviour is not really a priority.
The study is based on the analysis of the performance of these companies from 1992 to 2012, therefore quite an extensive period, and the measurements being considered are those related to the level of diversity in the company, relationships and interactions between employees, environmental sensitivity and attention to human rights.
Professor Cronqvist explains at the HBR interview that several studies in the economic, psychological and sociological fields demonstrate that women are more likely to worry about the welfare of other people in society than men, and that daughters augment this sensibility in their parents. For example, a research by Eboyna Washington (Yale University) shows how members of Congress who have daughters are more likely to vote for the law on reproductive rights, while Adam Glynn (Emory University) and Maya Sen (Harvard University) have found similar behaviour in Court of Appeal judges involved in cases concerning gender issues. As highlighted by the professor, a turning point of these studies is that they have demonstrated that parents are not the only ones that influence the behaviour and habits of children, but that the opposite also happens. And not only in the private sphere of family life, but also at the workplace. Almost trivially, seeing one’s daughter being discriminated at the workplace influences the behaviour of the parents in relation to the issue of gender equality in the company they work for.
And if the CEO is a woman?
The authors of the study confessed of not being able to provide statistically relevant data in response to this question, because the sample available to them was too small. Therefore, this simply means that out of the 379 companies used as samples for the study (it wasn’t possible to find information regarding the children of the CEOs of all the 500 S&P companies, so not all of the could be included) only 14 have female CEOs. 14 out of 379. 3.7%. This figure alone says a lot: one could begin a long discussion about this figure, but that’s not the point of the article.
While we cannot deliver meaningful results from an inferential point of view, Professor Cronqvist however reports that, observing the data (although small) of the sample, it shows that a company with a female CEO gets even better results in the CSR measurements.
The Professor says:
By our calculation, having a male CEO with a daughter produces slightly less than a third of the effect of having a female CEO. Comparisons of the data on congressmen and judges yielded similar numbers. So you could hypothesize that, on average, any man behaves one-third more “female” when he parents a girl.
In conclusion, the interview makes it clear how previous studies have already highlighted the greater predisposition towards the adoption of socially responsible policies of CEOs who identify with Democratic ideas, rather than those who identify themselves as Republicans. However, political affiliation is an autonomous choice, free and conscious, while in most cases the gender of one’s children is not.
No doubt that there is still room for more academic studies, but the results of this research – and the others cited here – are an alternative and very interesting approach as far as management studies are concerned.It could be a good reason to make that 3.7% gradually become a bigger figure. We await (more or less) confidently.
SOURCE: Harvard Busines Review
