‘Firms led by women have more employee-friendly initiatives’

A new study suggests firms with a female CEO have better labour relations and employee-friendly initiatives than those led by men.

female CEO

CEO owner leader company staff member portrait, possibly finance, accountant, attorney, manager

Firms led by female CEOs experience significantly fewer labour lawsuits and have a greater variety of employee-friendly initiatives, according to a new study.

The study, CEO gender and employee relations: Evidence from labor lawsuits, is published in the Journal of Banking & Finance.

It also shows that firms with female CEOs encounter fewer serious allegations of coercive labour practices.

The study, based on nearly 12,000 labour lawsuits recorded by the US National Labor Relations Board filed from 2000 through 2014, investigates the relationship between the gender of chief executive officers (CEOs) and firms’ employee relations, as proxied by labour lawsuits. It shows that firms led by female CEOs experienced fewer labour lawsuits and offer more worker-friendly initiatives such as profit-sharing, performance incentives and training and development.

Chelsea Liu, associate professor at the University of Adelaide, who conducted the study, said: “The findings of this study have significant implications for corporations, investors, policymakers, and practitioners, by providing insights into the differences made by female corporate leaders in the context of employee relations. Given that CEO selection is one of the most important decisions made by a board of directors, this study informs executives and directors of a hitherto undocumented link between CEO gender and day-to-day employee relations, which serves as a relevant consideration among the myriad factors influencing the choice of candidates for the top executive position.”

She adds: “This study contributes timely evidence to the growing body of empirical evidence on the business-case justification for gender diversity in corporate leadership.”

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