Recent research published in the December issue of the Journal of Financial Economics suggests that chief executives with daughters make more socially responsible decisions.
The study, “Shaped by Their Daughters: Executives, Female Socialization and Corporate Social Responsibility,” which is an update of one that was originally released in 2015, analyzed the familial information of 416 CEOs from S&P 500 companies. And the results show that CEOs with daughters scored about 9.1 percent higher than that of a median firm in a measure of corporate social responsibility — a third-party measure of how companies rank on community, diversity, employee relations and other metrics.
Co-author and chairman of the department of finance at the University of Miami School of Business Administration, Henrik Cronqvist, says that having a daughter opens executives’ eyes to gender-related issues of which they might not otherwise be aware.
“The research was designed to show causality and go beyond just saying there is a correlation,” he adds, pointing to data from the study that shows that when a new CEO with a daughter comes on board, the company becomes more socially responsible. The opposite is true when a CEO without any daughters joins the company.
“Different CEOs are shaped by different experiences,” he goes on, and we’ve recognized “the daughter effect” as an instrumental tool in shaping CEOs’ experiences and, subsequently, their decisions and actions before.
In 2011, a study of salaries of hundreds of thousands of Danish workers at 6,231 firms found that, when a male CEO had a daughter, the wage gap in his company closed by 0.5 percent on average. When a male CEO’s first-born child was a girl, that wage gap closed by nearly three percent. On the contrary, the birth of a son had no effect on the wage gap.
Earlier this year Harvard University researchers Paul Gompers and Sophie Wang also investigated the hiring patterns in the male-dominated world of venture capital. They found that firms with partners who had more daughters hired significantly more women — and those women also made more money. Plus, firms with more women delivered better performance and higher profits.
Put simply, “the daughter effect” could prove beneficial for both women and the companies for which they work.
AnnaMarie Houlis is a multimedia journalist and an adventure aficionado with a keen cultural curiosity and an affinity for solo travel. She's an editor by day and a travel blogger at HerReport.org by night.