"Can the implementation of female executives in organizations reduce corruption?"
Would the Lehman* Sisters guarantee ethical leadership?
By Ulerike Strubbe & Gudrun Vande Walle
Gudrun Vande Walle
Assistant professor in Governance and Ethics at Ghent University.
Master in Public Administration and Public Management at Ghent University
Since 2007 there has been a lot of speculation in the media about the probable causes of the economic crisis and the initiators of fraudulent decisions who contributed to provoke that crisis.
One of the suggested explanations for that crisis is perfectly reflected by catchy headlines in the media: “If only it had been Lehman Sisters” or “With women on board today’s economic crisis clearly would look quite different”. These headlines state that we have to search for an explanation in one specific direction: the top-management of the companies related to the economic collapse was considered to be the catalyst of the economic crisis. These companies had one thing in common: the leaders were men.
Some female experts tried to elaborate this idea that male leaders were responsible for the economic breakdown. They associated men with characteristics such as greed and personal gain, egocentrism and risk taking. Women were rather associated with ethical attitudes such as care, altruism and caution.
This hypothesis of the risk-taking male and the careful female leader was strengthened by well-known fraud cases of the past such as Enron, Lernout & Hauspie, Worldcom and Parmalat. All these companies were directed by men.
Based on the hypothesis that the bank crisis, as well as the above mentioned fraud and corruption cases, were initiated by the unethical attitude of the male top management, we set up a small research project.
The aim was to answer the central research question: Can female leaders decrease the risk of unethical behavior?
We tried to get a grasp on the perception of experts around the hypothesis that female leaders implement ethical business practices.
Before illustrating the results of our research we will first say something about the scientific literature about “Women and Corruption” we have used.
A first key area in the literature regards the distribution of corruption among women and their degree of corruption. For example:
- The policy advisory report ‘Engendering development’ of the World Bank (2001) was the first initiative that stated the implementation of women as a powerful force against corruption.
Although the World Bank report had an important practical impact, their view ‘more women, less corruption’ was not so innovative.
The pioneering studies focused on the relationship between gender and corruption were the ones by Dollar, Fisman and Gatti in 1999 (3) <<Are women really the fairer sex?>> and the study by Swamy, Knack, Lee and Azfar in 2000 (4) <<Gender and corruption>>.
In both studies the conclusion was that involving more women in public life lead to a decrease in corruption.
Both studies based their idea on psychological and sociological researches on typical characteristics of women, namely their helpful behavior (Eagly & Crowley, 1986), their less selfish character (Eckel & Grossman, 2008), their focus on collective interests and their higher values of integrity.
“The fairer sex” or not? And at what level does corruption occur?
- Data by Women’s Economic and Social Human Rights’ (WESHR) and International Country Risk Guide (ICRG) showed that the entry of women into public life had a positive effect on the reduction of corruption.
Moreover, due to these results some countries decided to hire more women in public organizations. Examples were the traffic police of Mexico City and Lima. By replacing male traffic cops with female colleagues the authorities hoped to reduce street corruption. (Esarey & Chirollo, 2012,
Other researchers had more doubts about the explanation of the correlation between gender and corruption. We can classify their considerations at macro, meso and micro level:
- Macro – An initial doubt was based on the changing political climate. Democratization creates societies that are more open to diversity, more transparent and less corrupt. These democratic values also penetrate organizations, which means that they also welcome more diversity.
As a result the relation between women and corruption is an indirect one via the democratization of institutions. (Sung, 2012; Esarey & Chirillo, 2012; Kolstad & Wiig, 2011; Jianakoplos & Bernasek, 1998; Schulze and Frank, 2003)
It is “the fairer system” and not “the fairer sex” that explains the decrease of corruption.
- Meso or organsiational level - A first explanation at the organizational level is based on the fact that women have difficulties in breaking through the glass ceiling in order to take leading positions in the organization. Corruption has been described as a crime that mostly starts at the top of the organizations. (Goetze, 2003; Appelbaum, Audet & Miller, 2003)
Possibly that explains why women don’t commit corruption: they don’t have the chance.
Secondly corruption is a crime that only succeeds with the support of a powerful network. This is certainly a fact for the large corruption cases. The few women that succeed in reaching the top of the organization are excluded from participation in the male networks. (Goetze, 2003)
- Micro - A last explanation that undermines the hypothesis of women as the fairer sex has been identified at the micro level or individual level.
A first hypothesis is the low detection rate. Corruption is a crime that is hard to detect for the police and the judicial system. This is certainly the case for the smaller corruption cases at the lower level of the organization. Due to their non-leading positions in the organization women get involved in smaller crimes at the lower levels. Women commit corruption at the lower level of the organization by making usage of the limited opportunities they have. The statistics on Pink Collar Criminals are alarming. According to the FBI, male embezzlers have increased only 4% since 1990 while Pink Collar crime has increased over 40% during that time period. Hence, this creates a misconception that women are less corrupt.(Branisa & Ziegler , 2010)
Another related hypothesis is that the same kind of crime, when committed by a woman, is punished harder. (Dodge, 2007) That frightens women and restrains them from committing crime.
To conclude about the relation between women and corruption we can say that:
Female leadership and corruption
- It is widely accepted by researchers that there is a kind of relation between the lower level of corruption and more women working in the organization
- However there is less consensus about the reason why this is the case. Suggestions are the socialization, the lack of opportunities and the fear for harsher punishments.
The question that automatically follows is: can we find a relationship between female leadership and corruption?
Grand corruption is a crime phenomenon that is related to powerful people in top functions (Huberts, 2010) Small corruption cases in the organization often occur because the employees take over the attitudes of the leaders in the organization. (Vande Walle, 2011) Consequently to decrease corruption in the whole organization it is wise to focus on the leadership style.
If the top manager has the characteristics of an ethical leader, this will seep through the whole organization. So the first question we have to answer is about the characteristics of an ethical leadership style. The ethical (also known as the transformational) leadership style:
- Prioritizes the collective before the interests of the individual
- Leads to transparency
- Facilitates a two way communication, that respects the rights and needs of the subordinates
- Checks continuously if actions are ethical.
Now we know what ethical leadership is, we have to explore whether there is a typical female leadership style that is consistent with the above principles.
The leadership style that is related to women in literature comes close to the characteristics of ethical leadership. (Muchiri, Cooksey, Di Milia, Walumbwa , 2011; Bass & Avolio, 1996) Women in a leading position are said to take over the leadership style that is closest to their gender characteristics. Women are educated to be soft, sweet, honest, helpful, supportive … . These characteristics are said to be reflected in their leadership style. And these characteristics are very similar to those of the transformational leader.
Given the fact that the female leadership style and the transformational leadership style are said to be very similar, we can form the hypothesis that the majority of female executives will spontaneously take over an ethical leadership style.
Reflections from the field
We submitted these above elaborated ideas to 12 experts in the field: experts in the field of corruption, experts with a specific knowledge on leadership and males and females in leadership positions.
We interviewed three categories of people:
The central question of this research was: “Can the implementation of female executives in organizations reduce corruption?”
- Four experts in investigating corruption cases: two private investigators, a police investigator, a magistrate.
- Four experts in female leadership: two female academics working on gender issues, a human resources manager and one consultant in leadership.
- Four leaders: a male and a female public sector manager and a male and a female private sector manager.
We approached the respondents with three different sub-questions reported below with their respective feedback:
- “Do you see a relationship between leadership and corruption?”
Most respondents agreed that corruption occurs mainly at the level of middle management and top management in an organization. They explained it by referring to the networks of silence that protect leading managers, the success oriented culture at the top, the lack of fear of sanctions, the lack of social control, the bonus culture … . One corruption expert summarized these ideas by saying: “Corruption is not a gender problem but a power problem”.
- “Are women inclined to be involved in corruption?”
None of the respondents working in a leadership position or in investigating corruption were familiar with cases of corruption committed by women. Some of them explained this by the absence of the opportunity: only a few women succeed in breaking through the glass ceiling. Most of the respondents related this lack of corruption to the female characteristics that are expected from women. Softness, respectfulness and altruism were characteristics named by the respondents.
A last reflection on the low percentage of women involved in corruption corresponds to the above mentioned hypothesis of ‘pink collar crime’. Because of their inferior social position women do commit corruption themselves, but in a roundabout way, in using the opportunities they have. One given example of pink collar crime was that women (be they a secretary, wife or concubine) influence male leaders to make corrupt decisions.
- “Are female executives more ethical than male leaders?”
Around the connection between corruption and female leadership and whether women have a more ethical leadership style we can split the answers in two different categories:
a. Some respondents confirmed that they perceive women in top functions as having a more ethical style.
They explained that since climbing to the top was very difficult, women fear to lose their position again. This fear has an impact on their way of leading.
Another reason is the often vulnerable position at the top. They are permanently observed by their direct colleagues and also by the media. By applying the ethical leadership style they can probably become more socially accepted.
In short, the harder condemnation for female executives and the greater the fear of losing their position, the more likely it is that women will refrain from corruption.
b. The others explained that this ethical female attitude can quickly turn into a masculine attitude once they reach a top function.
The second category of respondents thought that women are more ethical until they reach the top of the organization. Functioning in senior positions is a “tough world”. These respondents explained that female executives are afraid of being considered too soft by their colleagues. To survive in that male-dominated culture they conscientiously choose a masculine leadership style.
A crucial remark by one of the respondents was the impact of the critical mass. One woman leader in an organization, no matter how ethical she may be, will not make the organization more ethical. The rule of the critical mass says that women have to occupy a certain percentage of the board before their ethical attitude will have an effect on the organizational culture. For a change of mentality one third of the leading functions must be executed by women, and these women have to be ethical leaders and not have chosen a masculine leadership style.
The question if female leadership can reduce corruption should be answered carefully. The respondents all thought that women are more ethical than men as long as we speak about the lower levels of the organization. There was less consensus about the fairer sex at the top of the organization.
First it is certainly not a fact that female leaders don’t commit corruption. Imelda Marcos, Winnie Mandela and Edith Cresson are only some famous examples of women in leadership positions who committed grand corruption. Based on the large literature review and the perception study we can say that the education of women and the way they are socialized in society can have a positive effect on the ethical attitude of women and indirectly also on their ethical leadership style. However people‘s attitude is determined by more than their gender.
Second there are a lot of examples of men in executive positions who use an ethical or female leadership style and succeeded in making their organization more ethical. That leads us to the conclusion that it is the feminine values (honesty, carefulness, transparency, …) of leadership, rather than the actual gender, that contributes to an ethical organization.
For future research we suggest further exploration of which kind of mechanisms make a leader take a more masculine (risky, dominant, non-participative, …), or a more feminine leadership style. Is it the personaI socialization trajectory? Or is it the business culture of the organization? And does gender equality at the executive level play a role in that? This can help to understand how leadership styles have an impact on the efficient prevention of corruption and also on financial crises.
Gudrun Vande Walle gained a Law degree (KuLeuven - 1995) and a PhD in Criminology (UGent - 2003). She is assistant-professor at Ghent University (B), Faculty of Economics and Business Administration and member of the research unit Governing and Policing Security (http://www.gaps-ugent.be/en).
Her research topics are corruption and anti-corruption policy in the public and private sector, gender and financial-economic crime and victimization and conflict resolution in the business context. She is also the local Research Correspondent on Corruption for Belgium (see: LRCC-network - DG Home Affairs – EC).
She has worked in academia since 1997 first at Ghent University, department of Penal Law and Criminology and since 2008 at Ghent University College in Public administration and management.
In January she started her Master Class Forensic Auditing at Antwerp Management School.
Ulerike Strubbe is Master in Public administration and Public management. She has written her Master’s thesis about the effect of female leadership on corruption.
At the moment she is studying for an advanced Master in International Relations and Diplomacy at the University of Antwerp.
Gudrun Vande Walle
Assistant-professor at Ghent University (B), Faculty of Economics and Business Administration.
Master in Public administration and Public management
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