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Expert comment: Firms should be clamouring to promote women to exec roles but should not be forced

Posted by Warwick Business School at 14 November 2019, 16:15 CET |
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Responding to the Hampton-Alexander review of women in senior management positions, Professor Nicolai Foss, of Warwick Business School, said:

"Companies should be clamouring to get more women into executive roles instead of dragging their feet as that is where they create the greatest value for firms.

"Indeed, our research found women may be the X factor for business innovation to succeed, especially in larger, more complex organisations.

"We found a positive relationship between the proportion of women in top management teams and that firm's innovation. The more women, the better the firm's ability to produce innovations. In fact, if a company wants to boost its innovation it is best to have just women in its top management team.

"But that does not necessarily mean governments should push companies to promote women to executive roles. We found in countries where the government has imposed quotas for the number of women in senior management positions, the effect of women producing more innovation was weaker.

"The results suggest that legally-binding quotas produced 'tokenism' and the selection of unqualified female managers, producing potentially negative effects for the firm.

"When promoting women was purely voluntary, we found that female managers were able to maximise their influence on the decision-making process."

Nicolai Foss is Distinguished Research Environment Professor at Warwick Business School.

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