Big Benefits When Women Lead


Is it possible that having more women in positions of authority can help keep your company out of trouble? Data from the banking industry suggests a possible link. That’s according to a recent Harvard Business Review article by Scott Berinato:


Barbara Casu of Cass Business School at City University of London and four coresearchers compared data on board and leadership diversity at large European banks against records of fines levied on those banks by the U.S. government since the global financial crisis of 2008. They found that banks with more female directors faced lower and less-frequent fines for misconduct, saving those institutions $7.84 million a year, on average. The conclusion: Banks with more women on their boards commit less fraud.


Casu offered several possible explanations for the correlation between more women on bank boards and fewer regulatory penalties.


More Women = Fewer Penalties


"Women tend to be nurtured from a very young age to be more caring, accommodating, and nice, whereas men are often rewarded for being aggressive and ambitious and seeking personal gain," Berinato writes. "Women could also be more risk-averse, which would cause them to speak out when something—like committing fraud—seems dangerous. We also know that there’s a gender punishment gap: Women are punished much more harshly than men for the same infraction. That might cause them to be more vigilant about stopping fraud; not speaking up carries much greater consequences for them."


Interestingly, the data also suggested that having a single woman on a board didn’t make the banks studied less likely to incur regulatory penalties, perhaps because it was difficult for them to speak up or be heard. It required at least three women board members to achieve the positive correlation. Berinato also noted negative reaction to the findings from some men, but pointed out that the study wasn’t intended to suggest that women were “better” than men, simply that they brought a different and valuable set of values and skills to the workplace.


Making Inclusion Matter


When it comes to attitudes towards diversity, there is often a tension between those who advocate for treating everyone – regardless of race, national origin, gender, sexual orientation, etc. – the same (the so-called “color-blind” approach) and those who insist that people’s backgrounds influence them as individuals and employees and that those differences should be acknowledged, celebrated and embraced for the value they can bring an organization.


It can be an understandably touchy subject to suggest that one gender may be better than others at X or one race may be superior to others at Y, that’s not the right way to think of diversity and certainly not the right way to think about inclusion. Rather diversity and inclusion are about understanding and focusing on the strengths diverse team members can bring to an organization. Organizations that understand and embrace this principal routinely outperform those that do not.


Be inclusive!


Recommended Reading

Becoming an Inclusive Leader

Inclusion: The New Competitive Business Advantage

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Are you tired of workplace diversity training that does not link to business? Are you tired of tactics that don’t drive business results? InclusionINC has inclusion training solutions and strategic consulting that link inclusion to employee engagement, productivity, innovation and retention, moving inclusion beyond tactics to a critical business strategy.

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