Can chief executives’ daughters shrink the wage gap?

Here is a theory. The birth of a daughter will do more to increase the diversity of her chief executive father’s company than any number of research findings or government directives.

David Gaddis Ross, professor of finance at Leonard N. Stern School of Business at New York University (and formerly of Columbia Business School), and Cristian Dezsö, assistant professor at the University of Maryland’s Robert H. Smith School of Business, have examined 12 years of Danish workforce data to test a hypothesis.

They believe that having daughters prompts male chief executives to implement more equitable wage policies – and because Denmark maintains detailed and comprehensive workforce data, it presented a perfect test-bed for their theory.

Earlier this month, Prof Ross and his co-researchers published their findings in a working paper. They found that a short time after male chief executives had daughters, women’s wages rose relative to men’s, shrinking the gender wage gap at their companies. The birth of a son, in contrast, had no effect on the gap. First daughters who were also the first-born children of a chief executive had a bigger effect than subsequent daughters, decreasing the wage gap by almost 3 per cent.

In an article titled “How corporate father can learn from their daughters”, published in Management Today in the UK in 2009, Niall FitzGerald, the former chairman and chief executive of Unilever, the European consumer group, said: “I’ve changed in response to the question: am I the boss I’d like my daughters to have?”

When his older daughter, Tara, went to Balliol College, Oxford, he was struck by “how much harder she had to work and tougher she had to be” than her male counterparts, he said.

It would make a fascinating study to correlate the number of women directors on the boards of Fortune 500 companies with the gender of their chairmen and chief executives’ children. If anyone has this data, please e-mail me.

The last word goes to Sir Roger Carr, chairman of Centrica, the UK utility, and future president (when Helen Alexander steps down in June) of the CBI, the employers’ group: “In my own career, there has been increasing recognition of the importance of women in business. In my daughter’s career, I hope it ceases to be an issue and becomes an accepted norm of corporate life.”

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Liz Bolshaw

Liz Bolshaw is a business journalist and editor. She has been a successful book publisher, online editor, magazine editor and publisher.

She was launch editor of the Europe-wide online community Entrepreneur Country, has published magazines for PwC, 3i, dunhill and Bafta, and launched The Sharp Edge, a magazine for and about entrepreneurs, with Duncan Bannatyne. She is a regular contributor to Thomson Reuters’ Venture Capital Journal.

Her last project for the Financial Times was as editor of the paper’s Business Education magazine.

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Andrew Hill is an associate editor and the management editor of the FT. He was City editor of the FT and editor of the daily Lombard column on British business and finance from September 2006 to December 2010.

He was the FT’s financial editor from June 2005 to September 2006, with overall responsibility for coverage of companies and markets. Before becoming financial editor, he was the FT’s comment & analysis editor, in charge of the paper’s opinion and features pages.

From 1999 to 2003, he was the FT’s New York bureau chief. He joined the FT in 1988 and has also worked as foreign news editor, UK companies reporter and correspondent in Brussels and Milan.

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Pino Bethencourt is a professor and leadership expert at IE Business School in Madrid. She is also an author and executive coach.

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Lynda Gratton is professor of management practice at London Business School.

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Linda Tarr-Whelan, former ambassador to the UN commission on the status of women, is a Demos distinguished senior fellow.