BUSINESSWEEK ONLINE : SEPTEMBER 25, 2000 ISSUE
ECONOMIC TRENDS

Women in the Boardroom
Why their presence can be a plus

Over the past decade, more and more corporations have added women to their boards of directors. This trend reflects both public pressure and the growing perception by boards that women can be as effective corporate managers as men and may even bring different and valuable perspectives to a board's decision-making process.

Writing in the current issue of Global Focus, management consultants Nanette Fondas and Susan Sassalos offer evidence that having women directors does indeed have a positive impact on board performance. Using a survey of 115 large public companies in the early 1990s, Fondas and Sassalos examine how factors such as the share of inside directors on a board, the degree of institutional ownership, the role of top management in choosing directors, and the presence of women directors affected the reported ability of boards to influence key management decisions.

The results indicate that boards with one or more female directors have substantially more influence over management decisions than all-male boards. Among the other variables, only the degree of institutional ownership significantly enhanced board involvement.

Why this positive effect on corporate governance? While it may simply be that influential boards tend to seek out female directors, the authors think otherwise. Women have tended to be outside directors, they note, and often bring a broader perspective to the table. They may also have to pass higher hurdles in the direction-selection process--which could well reinforce their determination to fulfill their responsibilities.

Whatever the reason, the team's findings bolster the view that women directors can improve board functioning.

BY GENE KORETZ

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