Business school professors have a knack for
finding some pretty bizarre links between the personal lives of CEOs and the
professional results at the companies they run.
Those who golf more than 22 times a year are
linked with lower corporate performance, while those who run marathons have
better results. Physical traits ranging from the width of a CEO's face to the
depth of his voice have been correlated with better performance and higher pay.
Now, researchers are finding a link between
the gender of a male CEO's children and how well his company behaves toward
society.
The most recent issue of Harvard Business
Review spotlighted new research showing that CEOs who have daughters get
roughly 12 percent higher ratings for being socially responsible than those who
have sons. And the median firm with a CEO who has a daughter spends an extra
13.4 percent of the firm’s net income on corporate social responsibility
programs, the study found.
"Having a daughter seems to make the top
executives of publicly traded companies in the U.S. a bit softer, specifically
in context of social responsibility," said co-author Henrik Cronqvist, a
professor at University of Miami's business school, in an interview. "They
seem to care more about others than just shareholders. Having a daughter seems
to push the executives to care more about other stakeholders."
Cronqvist and his co-author, China Europe
International Business School professor Frank Yu, used databases and Internet
searches to come up with their own list of S&P 500 CEOs who have children,
then looked at corporate social responsibility data from analytics firm KLD for
the years 1992 to 2012. KLD rates firms on six categories—community, diversity,
employee relations, environment, human rights and product—and analyzes
companies on their strengths and weaknesses in such areas.
The pair found 379 CEOs for which they had
both corporate social responsibility scores and information on their children's
gender. They found that companies run by male executives with female children
rated higher for diversity, employee relations and eco-friendliness. Of those,
according to Cronqvist, the category where the impact was the strongest is
diversity.
What's the reason for the link? In the paper,
the researchers pull from past studies showing that women tend to attach more
weight to the well-being of others. In addition, they draw on the idea that
while we mostly think of parents influencing their children, the opposite is
also true: Children have an impact on their parents' thinking and beliefs.
An effect known as the "female
socialization hypothesis" has been shown to prompt fathers to adopt some
of their daughters' values and thinking.
For instance, past research shows that
congressmen who have daughters are likely to vote more liberally, particularly
on reproductive rights issues. Other studies have shown that the daughter
effect exists among parents generally becoming more politically liberal, as well
as that male federal judges in the United States who have a daughter are pushed
to the left on gender-related cases.
Cronqvist points to former Chief Justice
William Rehnquist, who was speculated to have been influenced by his daughters
in deciding to vote in favor of state governments having to abide by the Family
and Medical Leave Act. British Prime Minister David Cameron mentioned his
daughters when he announced his intent to force companies to publish their
gender pay gap. “I want them to look back at the gender pay gap in the same way
we look back at women not voting and not working – as something outdated and
wrong that we overcame, together,” he wrote in The Times in July.
The average age of CEOs in Cronqvist's study
was 57, so many of their daughters are grown. As a result, their initial
experiences in the workplace, their choice of college major or their
professional aspirations may have begun to influence their fathers' thinking.
Another study from 2011, for instance, found that after CEOs of Danish firms
had a daughter, female employees' wages rose relative to their male peers,
narrowing the wage gap.
It's unclear how having children vs. not
having children, rather than whether the children were male or female, might
affect a CEO's behavior. Because less than 5 percent of the CEOs had no
children, Cronqvist excluded them from his study.
Another group that had a small sample in the
study was female CEOs. Less than 4 percent of the executives studied were
women—so while those women did have much stronger corporate social
responsibility ratings than their male peers, it was such a small group that
the findings are not reliable.
However, Cronqvist does use those figures to
make an interesting comparison. Even male CEOs with a daughter tend to have
only about one-third the social responsibility rating of CEOs who are women. Or
as Cronqvist puts it: "Having the daughter seems to make male CEOs one
third more female, with respect to the decisions being made."
-The Washington Post
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