In an interview at the Women at the Top conference in London, French Finance Minister Christine Lagarde spoke with the FT on video about her conference address (http://video.ft.com/v/677520169001/Lagarde-speaks-out-on-female-quotas). In the video (and in her conference speech), Lagarde comes out in favor of female quotas both in business and in political bodies. Of particular interest to me is her statement about the need for quotas to enhance corporate board diversity.
The conversation centers around the now-familiar contention that male testosterone is part of the reason for recent financial crises around the world. Says Lagarde:
If you have too much testosterone spirit around, there is that atmosphere of trying to compete all the time, trying to prove yourself to the detriment of this sort of common interest that should bring us together. And I believe, either because they’ve been in the minority for such a long time or because there are some feminine values – and I have questions myself about it – but certainly those skills can be very helpful in softening, in tempering, in bringing a bit of sense when there is too much male competition around.
Lagarde goes on to say that when she was younger she was against quotas, but she now favors them, both on corporate boards and in the political arena, and discusses pending French legislation on female board representation. As an aside, I seem to be the last to realize that Lagarde was a Baker & McKenzie lawyer, and the first female president of the firm’s executive committee, an experience she discusses briefly in the interview. She was also a member of the French national synchronized swimming team. (I go back and forth as to which of these feats is the most impressive in a Finance Minister).
I’ve lately been discussing a forthcoming paper, Dangerous Categories: Narratives of Corporate Board Diversity (with Lissa Broome and John Conley), and, in particular, our respondents’ claims about the unique “feminine values” that women bring to the boardroom. The bulk of our respondents’ narratives on this front relate to women’s greater ethic of care and sensitivity to employees, consumers, and the community, rather than to female risk aversion.
A few of our narratives touch on the risk reduction point, but normally the explanation given is that of reducing “group-think” and the risky behavior of bodies whose members all think alike, rather than the unique risk-avoidance tendencies of women as a group. Said one respondent:
regardless of what the statistical studies say, I think people know especially on the risk side that whenever you get anything involving sort of group think, everybody in the room having the same background, group of experiences and so forth that that is an absolute breeding ground for risk, for problems to occur. . . .
I think by and large the folks that believe that diversity is important put a very high value on it for that exact reason that they think this creates greater, frankly, psychological independence in the boardroom. It creates more viewpoints in the board room and that leads to better decision making I think and I think that’s a change from certainly fifteen or twenty years ago when I think it was purely viewed in terms of sort of social equity issues about increasing participation by women and minority group members on boards of directors and I don’t see that as much today.
I think the arguments in favor of board diversity are much more sophisticated today and that we’re really talking about trying to help boards to provide stronger oversight. We’re trying to help boards to eliminate the possibility of groupthink, I think.
The difference between Lagarde’s statement and our respondents’ theories regarding the impact of board diversity on corporate risk seeking is a subtle, but significant, one. Whereas Lagarde, supported by some research on risk-seeking and testosterone levels in investor behavior, takes the position that women in the boardroom will decrease risky corporate behavior due to unique feminine risk-avoidance attributes, our respondents are making a point about risk-avoidance in heterorgenous groups more generally.
This is not to say that our respondents reject the notion of unique feminine qualities in the boardroom. As I noted is a prior series of posts (see here, here, and here), many of our respondents generalized about women and the ethic of care in ways that were strongly reminiscent of Carol Gilligan’s feminist classic, In A Different Voice. Yet those generalizations centered on women’s superior empathy and compassion, not on their risk-aversion.
Either way, the potential dangerousness of such difference-based arguments for gender diversity is clear: to suggest demographic group-based difference of this sort is to open the door to both stereotyping and invidious comparison. This tension is evident in our respondents’ accounts, which simultaneously extol difference and express embarrassment with it (and, in my opinion, is evident even in Lagarde’s brief account).
Image Source (traders)
Image Source (Lagarde)