Firms with women in leadership roles are more attractive to investors and earn larger returns, at least in the short term, according to a new study involving a professor in the Alberta School of Business.
Lukas Roth in the Department of Finance looked at market reactions to two historical events of the past decade — the revelation of sexual abuse allegations against Hollywood film producer Harvey Weinstein, and the mainstream emergence of the #MeToo movement in the fall of 2017 — to see how they affected corporate culture.
“Together, these events rapidly brought to light the extent to which sexual harassment and gender discrimination were prevalent in business, while elucidating that such egregious behaviour would no longer be condoned,” write the study’s authors.
It might seem obvious that a healthy workplace culture improves performance, but it is difficult to measure, says Roth.
“From a researcher’s perspective, it’s difficult to examine, because you need a shock to the culture. We looked at the Harvey Weinstein scandal because it was a bit of a shock to the financial market — a wake-up call that this kind of behaviour is actually going on.”
Just after the Weinstein scandal broke in early October 2017, actress Alyssa Milano encouraged spreading the hashtag #MeToo — first launched in 2006 by New York activist Tarana Burke — to draw attention to the widespread occurrence of sexual assault and harassment.
Roth examined data from the top firms in the S&P Composite 1500 — a broad measure of the U.S. equity market — in late October of that year, focusing his attention on firms with women in top leadership roles, including those with women on corporate boards.
