An increase in female representation on a company’s board of directors results in a significant drop in the number of incidents of sexual harassment reported by employees, found a researcher from Laval University.
The addition of 10% women on the board of directors thus leads to a 22% drop in the incidence of sexual harassment as reported by employees over the following years, specifies the study published in the journal Corporate Governance: An International Review by Andréanne Tremblay and her colleagues Shiu-Yik Au (University of Manitoba) and Leyuan You (Texas State University).
“That corresponds to approximately one more woman, if we take the average size of the board of directors,” illustrated Ms. Tremblay, who is a professor at the Faculty of Administrative Sciences at Laval University.
A first study carried out by the researchers had come to a conclusion which is likely to give company managers cold sweats: if we form a portfolio with the 2% of companies most affected by sexual harassment, we find that this portfolio underperforms the benchmark portfolio by approximately 17%.
“Just to give an order of magnitude, if you take the average company, we’re talking about $1.8 billion in stock market value losses per year for each of these companies, so that’s huge,” pointed out Andreanne Tremblay.
Faced with this observation, the researchers wanted to know what strategies could be used to combat sexual harassment. They analyzed 2.96 million comments from American employees on job search sites Glassdoor.com and Indeed.com between 2011 and 2021.
The researchers found that women-led companies incorporated more social policies, including maternity leave, same-sex benefits, vacations, and general working conditions.
This may translate, we said in a press release, into “a healthier work environment” and less conducive to sexual harassment.
“When you put that into perspective, with the losses in stock market value that can be linked to the fact that the work climate is unhealthy, it’s a change that has a direct impact on stock market value, but obviously it also has a direct impact on the work climate and employee well-being,” summed up Ms. Tremblay.
“There is really a link between the work climate, employee performance, company performance and stock market value. »