Do Female Execs Have Cleaner Hands? ; Evidence Suggests a Link between Women and Ethical Behavior. but They Embezzle More Often. in a Post-Martha Stewart World, Corporate America Sifts Conflicting Claims

Article excerpt

Not long ago, it was the year of the whistle-blowing women - with Sherron Watkins of Enron, Cynthia Cooper of WorldCom, and Coleen Rowley of the FBI being celebrated on the cover of Time magazine. It was tempting to speculate that if more women were in charge, they'd be an ethical force capable of transforming top management.

But more recent criminal cases, against Martha Stewart and Enron's Lea Fastow, have tempered those hopes. Clearly businesswomen can cross ethical and legal lines right alongside the men.

So where should corporate America turn in a post-Martha world? As more women move into boardrooms and corner offices, can they have a cleansing effect?

Welcome to a contentious debate with plenty of ifs and buts - and few hard facts.

There is some evidence suggesting a tantalizing link between women and ethical business behavior. But not everyone buys it - and even those who do often disagree as to why.

"There's a camp that argues women are going to bring a different perspective based on their historically and culturally accepted caretaking roles," says Debra Meyerson, professor of education and organizational behavior at Stanford University. "And there's another perspective that doesn't buy into this [argument] that women and men are different in some fundamental way."

Many tread carefully somewhere in between. Advocates for appointing more women to corporate boards of directors say it would lead to better business practices - but not because women are inherently more ethical. "Because [women] have been outside [most corporate boards] for so long, as individuals they're bringing a new perspective. They're not necessarily just going to be one of the Greek chorus saying 'yes' to the CEO," says Toni Wolfman, chair of the corporate-board resource committee at The Boston Club, a professional women's group.

A 2002 Canadian study offers a rare glimpse beyond the anecdotes that are a staple of this debate. It found that 94 percent of corporate boards with three or more women ensured that their companies had conflict-of-interest guidelines, compared with 68 percent of all-male boards. When it came to verifying audit information, the figures were 91 percent vs. 74 percent, according to the Conference Board of Canada, an independent research group. The study doesn't claim a causal link, however, since it's possible that companies already engaging in such practices attract more women to their boards.

About 16 percent of board members in Canada are women. In Fortune 500 companies in the United States, it's about 14 percent. What's noteworthy about the Canadian study, Professor Meyerson says, is that it looked at boards with more than two women. Research has shown that unless a minority group reaches a tipping point of about 15 percent representation, its members are under extreme pressure to conform to the majority. Women who have served on boards confirm that finding, saying men show greater respect for their views as individuals when there is more than just a token woman present.

"We're not asking you to put them on [boards] because they're women, [but] if you're looking for the best directors, you can't afford to ignore half the universe," Ms. Wolfman says.

Embezzlement factor

As more women reach positions of power in the business world, some observers say, there will simply be equal opportunity for corruption.

Embezzlement statistics bolster this argument. In 2002, women committed slightly more embezzlement crimes than men. A recent New York Times analysis of federal data showed that between 1993 and 2002, embezzlement by women increased 80.5 percent to 5,917 (compared with 5,898 by men).

In the broader category of occupational fraud and abuse, men do commit 75 percent of the crimes, and they steal larger amounts of money - a median of $185,000 compared with $48,000 for women, according to a 2002 report by the Association of Certified Fraud Examiners. …


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