Women bosses are better at keeping workers happy, according to a study of nearly 12,000 lawsuits which revealed stock market firms led by female CEOs faced fewer claims of malpractice and coercive behaviour.
New research released today by the Journal of Banking & Finance found that female chief executive officers foster better employee relations.
Using workforce disputes, the study considered whether there is a link between the gender of a chief executive officer and the company’s connections between employees.
Researchers analysed data on 11,970 labour lawsuits filed against leading stock market firms from 2001 to 2014.
The results showed that firms led by female CEOs had ‘significantly fewer’ labour lawsuits filed against them and were also less likely to experience allegations of coercive labour practices.
New research released today by the Journal of Banking & Finance found that female chief executive officers foster better employee relations (file photo)
Female CEOs were also associated with a greater variety of employee-friendly initiatives adopted by their firms.
The results backed up previous studies suggesting that female corporate leadership styles may be better at building good relationships with employees.
Lead author Chelsea Liu, from the University of Adelaide in Australia, said: ‘Given that CEO selection is one of the most important decisions made by a board of directors, this research provides new evidence about the relationship between CEO gender and employee relations.’
She said evidence shows that female and male executives tend to have different management styles.
Specifically, researchers find that female executives on average are characterised by a more democratic or participative style, in contrast with the more directive style adopted by male executives.
Female managers are also more likely to foster an environment of trust and cooperation, whereas male leaders tend to emphasise command, compliance, and competition.
Using workforce disputes, the study considered whether there is a link between the gender of a chief executive officer and the company’s employee relations (file photo)
In the context of relations with a workers, a more inclusive leadership style is expected to contribute to building stronger relationships with employees.
Ms Liu said: ‘In the event of potential issues, a culture of trust and cooperation can help prevent, mitigate or resolve contentions before they escalate to grievances or complaints.
‘Overconfident CEOs are more likely to make decisions which increase their firms’ vulnerability to problems, crises and litigation risks.
‘Empirical evidence shows that female executives and directors exhibit less overconfidence and a greater openness to seek expert advice and both traits are expected to reduce the risks of labour disputes and to prevent or mitigate breakdowns of labour relations.’
She added that female corporate leaders tend to demonstrate greater sensitivity towards ethical issues as found in previous research, which showed female executives are more receptive to a code of ethics compared to male executives.