Female Leadership and Firm Profitability: firms lead by women more profitable

This report, witten by Annu Kotiranta, Anne Kovalainen, Petri Rouvinen has been published by the Finnish Business and Policy Forum. This should inspire our shreholders when they chose a CEO…

Summary

Less than a tenth of the CEOs of Finnish firms and less than a fourth of the corporate board members are women. From a social standpoint more women are desired in top management, but should firms’ owners and those represent¬ing their business interests be concerned with women’s role in top management? Since hard facts have been in short supply, we seek to an¬swer the question by applying scientific research methods.

Our results indicate that a company led by a female CEO is on average slightly more than a percentage point – in practice about ten per cent – more profitable than a corresponding company led by a male CEO. This observation holds even after taking into account size differences and a number other factors possibly affecting profit¬ability. The share of female board members also has a similar positive impact. These findings are significant and important not only from a statistical and research perspective but also from a business standpoint.

The Danish model and flexicurity

When Per Kongshøj Madsen, one of the fathers of the flexicurity Danish model, from the CARMA centre of the University of Aalborg, writes an excellent synthesis about flexicurity and the Danish model. You will learn what are the 4 pillars of flexicurity, and have a balanced view on the Danish model, far from the excessive views of those who worship it and those who hates it. This paper has been prepared for the European Employment Observatory, and is a Danish contribution to the EEO Autumn Review 2006 ‘Flexicurity’.

Introduction

The period since 1993 has been a ‘golden age’ for the Danish labour market. In 2006, recorded unemployment was at its lowest level since 1975, and the employment rate is now the highest in the European Union. This has attracted a good deal of international attention. Thus OECD has cited the Danish combination of a flexible labour market and high social security as a role model for other European countries (OECD, 2004, chapter 2). In connection with EU’s employment strategy, and in individual EU countries such as Germany and France, Denmark has been used as a textbook example of how a member country can combine a dynamic economy, high employment and social security. In the international debate on flexicurity – or ways of combining labour market flexibility and social security – references to Denmark abound (Wilthagen 1998; Wilthagen and Tros 2004; Madsen 2003; European Commission, 2006, chapter 3).

Small is Resilient–the Impact of Globalization on Denmark

Small is beautiful, small is resilient: it is really interesting to see that a small country is sometimes better at facing globalization than bigger ones. The example of Denmark, in this article from , KlausNielsen and Stefan Kesting publish in 2003 in the review of Social Economy, is teaching a lesson for our governments.

Abstract
The aim of this article is to investigate the impact of globalization on the Danish economy. We focus on four possible influences of globalization and European integration (as one of the expressions of globalization) which are widely discussed in the scientific discourse on this topic and appear to be relevant for the Danish case. These dimensions are the reduction of the repertoire and effectiveness of national economic policy, the pressure for industrial restructuring, the seemingly required welfare retrenchment and the ideological implications of globalization as a predominant neo-liberal discourse. On the one hand we discuss Denmark as a typical example of a small European state and a Scandinavian welfare state regime, on the other hand we put emphasis on its nation peculiarities. The article shows that Denmark changed and adapted successfully to challenges of globalization while keeping the core of its particular form of the Scandinavian welfare model.

In addition, both its smallness and its distinctive national characteristics equipped Denmark well to turn the impact of globalization into a successful strategy for survival. However, there are indications that the translation of neo-liberal ideas in the Danish negotiated economy will lead to political disruption that challenges fundamental features of the model. Whether this may undermine the dam that had hitherto held back the globalization pressures in the Danish context and secured a response in accordance with the inherited characteristics of the Danish model remains an open question.

Introduction
There is an extensive literature on the impact of globalization on the autonomy of nation states, social democracy and the welfare state. Much of this literature seems to agree on the fact that globalization has reduced the importance of national boundaries for economic transactions and has asserted structural pressures for change. However, there are diverging views about the overall effects of these changes. Some argue that the forces of global competition lead to reduced state spending and state intervention, more “market-friendly” policies, and the demise of social democracy and the modern welfare state (e.g., Garrett and Lange 1991, Gill 1995, Cox 1997). Others argue that the social and political impacts of globalization vary significantly dependent on the mediating role of the institutions of nation states (e.g. Hirst and Thompson 1999, Weiss 2002, Kjaer and Pedersen 2001). A growing literature, drawing primarily from an institutionalist perspective, stresses the growing empirical evidence of a wide variety of nation specific trajectories of national welfare and industrial-relations institutions and their path-dependence (Esping-Andersen 1996, Berger and Dore 1996, Crouch and Streeck 1997).

The predominant view seems to hold that economic globalization exposes all nations to policy constraints with the strongest pressures coming to bear on small nations who are more economically vulnerable. Yet this view is not uniformly held. Based on her review of three areas of economic policy and intervention–taxation, fiscal spending and industrial policy–Weiss (2002) concludes that the state has much more room for maneuvering than what she calls the “constraints school” seems to assume. She argues that globalization has even “enabling” effects, and that small states are not necessarily more “constrained” and less “enabled” by globalization than larger states. Size matters less. What matters more is the character of national domestic institutions.

Denmark is an interesting case in this respect. As part of the Scandinavian vanguard model of social democracy with its high-tax, high-spending regime, strong labor market policies, high income equality and equal wealth distribution, Denmark would seem a prime candidate for declining autonomy in the era of globalization. Furthermore, the Danish industrial structure has often been characterized as lagging, vulnerable and pre-Fordist, especially in comparison to its Scandinavian neighbors (Mjoset 1987). In recent years. however, Denmark has been viewed by some as a model for maintaining high aspirations of welfare and social democracy despite the challenges of globalization (Nielsen 2001).

The full article on the web

Cultural Diversity: a glimpse over the current debate in Sweden

It is interesting sometimes to see that southern centres of research are interested in the Nordic models, such as Fondazione Eni Enrico Mattei, from Milano (web site: www.feem.it). This paper, from Kiflemariam Hamde of the Umeå School of Business, from Umeå University in the north of Sweden, makes an interesting analysis of the Swedish approach to diversity. Some of these elements have changed since the September 2006 elections, but the analysis is still valid.Summary
A year and a half ago, the Swedish government decided 2006 to be The Year for Cultural Diversity (Agenda för Mångkultur, 2005). The general purpose, according to the directive, is to facilitate the possibilities for all citizens to participate in all aspects of the cultural life by enhancing appropriate arenas for different traditions (Agenda för Mångkultur, 2005). This policy decision was not a surprise to both observers and participants of the diversity debate. There has been a growing interest in the virtues of diversity for business effectiveness and success (mångfald.com), heightened scrutiny of institutional and organizational life by the mass media, and legitimizing debates by political parties which had always had some form of concern for diversity, if not for its own sake, at least for capitalizing on the legitimacy of diversity politics in the expectation of local and parliament elections next September. The proclamation of 2006 as a Year for Cultural diversity thus comes naturally from the broadened debates and organizational programs, each actor trying to get legitimacy by using the concept of cultural diversity to suit the demands of the times. Indeed, cultural diversity has become a priority agenda for any legitimate actor, at least in terms of programs and polices, if not in action. Moreover, the coordinator of the 2006 Cultural Year consistently promised in the mass media that this would be “the starting point”, and not merely a celebratory performance (VK, 28 October 2005; DN 3 January 2006). Already, what are called as the Cultural diversity consultants had worked since 2003 in eight counties as a partial preparation for this year, and to raise the consciousness of relevant actors in the field of culture and cultural institutions, especially those financed by state money. Private cultural associations, however, are invited to participate during the diversity year but they were not invited to co-design the contents of the diversity year.

The European Social Model (ESM) and cultural diversity in Europe

This analysis, from Jean-Claude Barbier, is a working paper from the Department of Economic, Politics and Public Administration of Aalborg University, already well-known for our readers. The idea of referring to cultural diversity in order to analyse the European Social model is an interesting one, and, even if it not stricto sensu a Nordic work, I feel that it is interesting for all our readers.

Introduction

In the past forty years a voluminous body of literature has been published to analyse the phenomena of European integration, Europeanization, convergence and diversity of all kinds of institutions and social practices across states that are members of the European Union. A long journey was made from the first studies, like for instance Ernst Haas’s who, in 1968, revisited his 1958 theory of ‘spill-over’, after General de Gaulle, to him, had changed the conditions of European integration, because he was “a true nineteenth nationalist” (1968: xviii). Spill-over, Haas thought in 1958, in the first edition of his book, was inevitable: it was, he wrote, “unlikely that the General Common Market can avoid a species of political federalism in or-der to function as an economic organ” (1968: 317). Why “political federalism” has still to really emerge in the present conditions remains to be explained and we will deal with only one small angle to this question, namely, the special case of the ‘social dimension’ of European integration.

We will contend here that, despite the immense change brought to Europe by the 50 years of initiatives started by the 1957 Treaty of Rome, despite the crucial aspect of ‘negative integration’ (Scharpf 2000) and the increasing homogenisation of elites through their cross-national socialisation, ‘political cultures’ still matter to such an important degree that they preclude, and probably will preclude for a long time, the very possibility of actually implementing the basic process and practices that ‘solidarity’ demands, under the now classical institutionalised forms of ‘social protection’ (Barbier and Théret 2004).

Finland: opportunities to reconcile family and work

A book, published by the Finnish Ministry of Health, under the supervision of Permanent Secretary Kari Välimäki, to be read by all the business managers, in order to learn to make profit by supporting their human force to live together a good family life and working life.

The writers of the book are Rolf Myhrman, the Ministry of Social Affairs and Health [chapter 1], Tomi Hussi, the Finnish Institute of Occupational Health and Guy Ahonen, Swedish School of Economics and Business Administration [chapter 2], Sini Laitinen-Kuikka and Eila Tuominen, the Finnish Center for Pensions (ETK) [chapter 3], Olli-Pekka Ruuskanen, the Research Institute of the Finnish Economy (ETLA) [chapter 4]. Minna Salmi, and Johanna Lammi-Taskula, the National Research and Development Centre for Welfare and Health (STAKES) [chapter 5] and Anita Haataja, Government nstitute for Economic Research (VATT) [chapter 6].

Preface
Ageing is first and foremost a great achievement, the reflection of Europe’s high level of economic development and high standards of living. It will be difficult to maintain the potential for growth and employment against a background of shrinking working age population and ageing workforce. We all want to live longer and in better health.
This in turn will enable us to remain active and independent longer than previous generations. Young adults need help to realise their plans with regard to raising a family. In this respect, the postponement of the age of mothers when bearing their first child should be a matter of concern.

Sweden: Childhood poverty has a negative impact on attainment in adulthood

In a new Working Paper two researchers shows that living conditions during childhood and adolescence structure socio-economic circumstances also in midlife. It is not a surprise, but it is a new proof coming from 2 researchers and the Swedish prospective institute.
Childhood Poverty and Labour Market Exclusion. Findings from a Swedish Birth Cohort.
Bäckman, Olof & Anders Nilsson
Arbetsrapport/Institutet för Framtidstudier; 2007:13

Abstract

Research has consistently shown that poverty and economic hardship have negative consequences for children. Few studies, however, have examined whether these consequences persists into adulthood. In the present paper we broaden the focus and analyse how living conditions during childhood and adolescence structure socio-economic circumstances also in midlife. How does exposure to poverty during childhood and adolescence affect future probabilities for labour market exclusion and inclusion in early adulthood and in midlife?

The data are drawn from a new longitudinal Swedish data set – the Stockholm Birth Cohort Study (SBC) – in which we can follow a cohort of Swedes from birth (1953) to the age of 48 (2001). Our results show that childhood poverty clearly has a negative impact on attainment in adulthood. Persistent poverty in the family of origin and entering poverty in adolescence are particularly detrimental for life chances. This is most salient in the analysis of exclusion in midlife. Educational achievement and deviant behaviour (criminality and drug abuse) are identified as important intervening variables. The results are interpreted as a process of cumulative disadvantage. In our final analyses we focus on those excluded from the labour market in early adulthood and their likelihood to be included in midlife. We find that that resource attainment in terms of education and family has positive effects for the chance for inclusion and may in that respect be regarded as turning points.

There is, today, consensus regarding children’s rights to equal life chances. We know that poverty and other adverse living conditions not only have a direct impact on children’s well-being, but also that they have salient effects on how life courses develop. Research has consistently shown that poverty and economic hardship have negative consequences for children. Few studies, however, have examined whether these consequences persists into adulthood. In the present paper we broaden the focus and analyse how living conditions during childhood and adolescence structure socio-economic circumstances also in midlife.