A new study from the University of Notre Dame finds that companies with more women on their boards of directors report fewer workplace accidents. This research underscores the importance of gender diversity in enhancing workplace safety and regulatory compliance.
The boardrooms of corporate America have long been criticized for their lack of diversity, particularly their exclusion of women. However, legislative changes and investor demands have increasingly pushed companies to recruit female directors. New research from the University of Notre Dame highlights the significant impact these changes can have on workplace safety.
The study, conducted by Kaitlin Wowak, the Robert and Sara Lumpkins Associate Professor of Business Analytics at Notre Dame’s Mendoza College of Business, alongside Yoonseock Son, an assistant professor of information technology, analytics and operations at Mendoza, and Corinne Post from Villanova University, is the first to examine the effect of female board representation on workplace safety.
Their research, published in the Journal of Operations Management, reveals that companies with more women on their boards experience fewer workplace accidents and injuries.
According to Wowak, the key factor is not just the presence of women but their inclusion in powerful positions on key board committees.
“However, simply adding women directors is not enough,” she said in a news release. “Their influence on future workplace safety increases significantly when they hold powerful positions on key board committees because they feel more comfortable speaking up and get better traction on their ideas.”
The team analyzed data from 1,442 firm-year observations across 266 firms between 2002 and 2011. They looked at Occupational Safety and Health Administration (OSHA) workplace safety data, director-level variables from Institutional Shareholder Services, and information from Violation Tracker, including fines and penalties from various regulatory bodies.
Their findings suggest that female directors help prioritize workplace safety, likely due to their more considerable stakeholder engagement, inherent risk aversion and preference for regulatory compliance.
This aligns with prior studies suggesting that female directors often possess more experience in community outreach and philanthropy, making them more likely to advocate for employee well-being.
Son noted the substantial economic implications of these findings. With workplace accidents costing U.S. employers over $170 billion annually, the research underscores a critical need for firms to balance efficiency with safety to avoid accidents.
“A board with more women will specifically ask the top management team to report to them on workplace safety,” Son added. “Women will set the tone at the top that employees must strictly follow rules, including safety guidelines.”
Interestingly, the study also examined the impact of racial and ethnic minority directors, finding similar positive effects on workplace safety. This suggests that diversity in corporate leadership, in general, brings unique social perspectives that enhance safety protocols.
Moreover, the presence of both female and minority directors produces a synergistic effect, further bolstering workplace safety.
“With more females in the upper echelons, the effect of similar minority representation on future workplace safety becomes even stronger, and vice versa,” added Wowak.
The researchers advocate for firms not just to recruit women and minorities but to place them in influential board roles. This approach can mitigate inhibitory influences and give them more opportunities to drive discussions and actions.
“Having power reduces their inhibitions, limits interference from others and provides more opportunities to speak up and steer discussions,” Son added. “And boards facing greater scrutiny are more likely to leverage their unique perspectives.”
Source: University of Notre Dame