Daughters make companies more gender-equal

A new study with researchers from Jönköping University (JU), Stockholm School of Economics and Erasmus University in Rotterdam shows that Swedish companies led by a male CEO w with daughters become more equal - but only when the fathers realize how tough it is for girls and women.

The researchers have looked at all companies founded in Sweden between 2004 and 2017 - and it shows that getting daughters affect gender equality in fathers' companies in a tangible way. In companies with a male CEO/founder, the percentage of women employed increases by an average of eleven per cent - after the CEO has a daughter (compared to if he has a son).

However, it is not just about becoming a father to a daughter – the effect does not come automatically when the daughter is born. Only when the fathers see and experience the inequality that the daughters face do they begin to take the issue of women's equality seriously.

“So there are opportunities, but I want to teach my daughter that when Per, who is 50 and has been in the industry for 20 years, starts patronizing her, my girl should push herself forward and resist,” says one of the Swedish CEOs who are included in the study.

That fathers learn and develop through their daughters is in research called the “daughter effect”. It has previously been documented among other conservative judges in the United States as well as financial decision-makers. However, this is the first time it has been documented among entrepreneurs.

“What we find particularly exciting is that we found that the daughter effect takes time to mature and the learning process to realize more about daughters' vulnerability only begins some time after she is born,” says Lucia Naldi, professor of Business Administration at Jönköping International Business School, JU, and one of the researchers behind the study.

The researchers have mapped this learning process by analyzing several years of data on male CEOs with daughters and talking to male company founders. The daughter effect was not visible at all immediately after the birth but became vital when the founder-CEO’s girls started school.

Company boards more equal

The daughter effect not only means that more women are hired but also makes company boards more equal. On average, the percentage of women on the board has increased by four per cent - after the daughter has reached school age.

In contrast, CEOs in the group who only have sons spoke about how gender equality has "gone too far" and how they are "forced" to hire women.

“We didn't expect that there would be such significant differences between CEOs with daughters and those with sons regarding their view of gender equality. However, after conducting interviews, it turned out that there is a completely different awareness of these issues among CEOs who have daughters,” says Timur Uman, professor of Business Administration at Jönköping International Business School.

However, the researchers point out that there is a limit to how much change a CEO can bring about. When the companies grow to more than ten employees, the founders often start delegating the hiring processes, which leads to the effect of a more equal hiring process will disappear. However, the positive gender equality effect on the boards remains. This indicatesthat a CEO can positively influence his immediate circle, but in larger companies, gender equality work requires other tools.

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