How Females Run Businesses

March 22, 2012 in Daily Bulletin

In Slate Ray Fisman reported on a study that might provide insight into what a world run by women will look like:

  • In 2006 the Norwegian government required all companies listed on its stock exchange to increase the fraction of women on the board of directors to a minimum of 40% within two years.
  • Compared to companies that weren’t listed on the stock exchange and thus did not have to comply with the ruling, the publicly traded companies saw a decline in both profits and the number of people laid off.
  • The authors conclude that women are less likely to lay-off workers, and that this leads to short term declines in profit. However it is possible that over the long run this actually improves corporate performance by ensuring labour loyalty. Since it’s only been four years since the ruling went into effect it’s too early to say.

To read more about the gender differences between men and women, the details of the study, and what this means for the United States, click here.

Source: Slate