Gender and the Law Prof Blog

Editor: Tracy A. Thomas
University of Akron School of Law

Wednesday, June 10, 2020

Women's Triple Bind in Corporate Culture That Valorizes Alpha Male Culture

Naomi Cahn, June Carbone & Nancy Levit, Women, Rule-Breaking, and The Triple Bind, 87 Geo. Wash L. Rev. 1105 (2019).

Two growing literatures critique Hobbesian corporate cultures. Management analyses document the way high-stakes/zero-sum bonus systems undermine, rather than enhance, productivity as they subvert teamwork, valorize self-interested behavior, and weaken ethical standards. This literature treats negative effects of such systems, including lawless and unethical behavior, as the unintended consequences of efforts to shake up complacent institutions or replace an insular old guard with an ambitious and meritocratic new workforce. A second, darker literature terms such Hobbesian environments “masculinities contests” that select for those executives who best exemplify masculine traits such as a single-minded focus on professional success, physical strength, and the willingness to engage in no-holds-barred competition. This literature treats the rule-breaking environment that results as an incidental byproduct of the way that such cultures valorize masculine traits. Drawing on insights from criminology, psychology, and feminist theory, this Article suggests another possibility: that certain management cultures intentionally design the competitions to facilitate breaking the rules with impunity.

In a Hobbesian world, where some profit handsomely from defying convention, zero-sum competitions play a role that extends beyond valorizing alpha males. They select for leaders who will lie, shortchange their families, and break the law to get results—and do so without explicit orders that might subject upper management to accountability for the practices. In such a world, women fall behind not necessarily because of misogyny, though such environments often breed it. Instead, they lose because of a triple bind. First, women cannot prevail in such competitions unless they can outmaneuver men, credibly display greater devotion to the job, or more brazenly flout the laws. Second, they are disproportionately disliked and punished for displaying the self-centered, rule-breaking behavior of men. Third, women become less likely to seek positions because they correctly perceive that they could not thrive and are more likely than men to decide they do not wish to do so on such terms, reinforcing the male-identified character of such environments. Where these companies’ business models depend not just on the ability to upend traditional practices, but to break the law, the companies cannot address gender disparities without addressing the business model itself. The Article concludes that gender inequality is intrinsically intertwined with the evisceration of the rule of law in corporate America.

June 10, 2020 in Business, Masculinities, Workplace | Permalink | Comments (0)

Thursday, May 28, 2020

A New Proposal to Redress the Gender Disparity in Registered Patents

Miriam Marcowitz-Bitton, Yotam Kaplan, Emily Michiko Morris, Unregistered Patents and Gender Equality, 43 Harvard J. Law & Gender 47 (2020)

Women do not get a fair share when it comes to patenting and are far less likely to own patents. This disparity is in part because of not only the inherent biases in science and technology and in the patent system itself, but
also because of the high costs of even applying for patents. This article therefore proposes an unconventional new regime of unregistered patent rights to relieve women and other disadvantaged inventors of the costs of
applying for registered patent rights and to help them gain greater access to patent protections. Patents are a glaring exception to the unregistered protections provided in other areas of intellectual property, which are more
egalitarian in design. By providing automatic patent rights, our proposed regime would allow for greater protection for disadvantaged innovators, in much the same way that copyright, trademark, and other forms of intellectual property currently do.

 

To explain our proposal, we detail the challenges facing women and other disadvantaged inventors in applying for patents as well as the fact that other intellectual property regimes do not require such applications. We also
address a number of objections that our proposal would inevitably raise. In particular we show that, because our proposed unregistered patent system would grant rights for only three years and would protect only against direct copying, these rights would be unlikely to deter incremental or complementary innovation. Such rights would also be fully subject to invalidation under a preponderance of the evidence standard.

 

Our proposed regime does not solve all of the issues female innovators face. Nonetheless, our proposed regime would benefit women and others by providing protection at no cost, without filing or renewal fees, and equally
importantly, by protecting even inventors with little or no knowledge of the patent system and its importance in realizing the benefits of their inventive efforts.

May 28, 2020 in Business | Permalink | Comments (0)

Friday, May 22, 2020

Why This Recession is a "She-cession"

NYT, Why Some Women Call This Recession a "Shecession"

The unemployment numbers released on Friday confirmed what we had all anticipated: The economic crisis brought on by the coronavirus pandemic is staggering, or as one research analyst at Bank of America put it to The Times, “literally off the charts.”

 

The scale of the crisis is unlike anything since the Great Depression. And for the first time in decades, this crisis has a predominantly nonwhite, female face.

 

“I think we should go ahead and call this a ‘shecession,’” said C. Nicole Mason, president and chief executive of the Institute for Women’s Policy Research, in a nod to the 2008 recession that came to be known as the “mancession” because more men were affected.

 

Women accounted for 55 percent of the 20.5 million jobs lost in April, according to the Bureau of Labor Statistics, raising the unemployment rate for adult women to about 15 percent from 3.1 percent in February. In comparison, the unemployment rate for adult men was 13 percent.

 
Women of color fared worse, with unemployment rates for black women at 16.4 percent and Hispanic women at 20.2 percent.
 
 
According to an analysis by the National Women’s Law Center, this is the first time since 1948 that the female
unemployment rate has reached double digits.
 

The April jobs represent an abrupt, disappointing reversal from a major milestone in December, when women held more payroll jobs than men for the first time in about a decade.

 

The biggest reason for these losses is that the industries hardest hit by the pandemic — leisure, hospitality, education and even some parts of health care — are “disproportionately nonwhite and female,” said Diane Lim, senior adviser for the Penn Wharton Budget Model, a nonpartisan research initiative.

May 22, 2020 in Business, Equal Employment, Pop Culture | Permalink | Comments (0)

Tuesday, May 5, 2020

Challenging the Legitimacy of CEO Predatory Behavior in Business and Gender Equality Terms

June Carbone & William Black, The Problem with Predators, 43 Seattle U. L. Rev. 44 (2020) 

Both corporate theory and sex discrimination law start with presumptions that CEOs seek to advance legitimate ends and design the internal organization of business enterprises to achieve such ends. Yet, a growing literature questions why CEOs and boards of directors nonetheless select for Machiavellianism, narcissism, psychopathy, and toxic masculinity, despite the downsides associated with these traits. Three scholarly literatures—economics, criminology, and gender theory—draw on advances in psychology to shed new light on the construction of seemingly dysfunctional corporate cultures. They start by questioning the assumption that CEOs—even CEOs of seemingly mainstream businesses—necessarily seek to advance “legitimate” ends. Instead, they suggest that a persistent issue is predation: the exploitation of asymmetries in information and power to the disadvantage of shareholders, creditors, customers, or employees. These literatures then explore how such CEOs may rationally choose to employ seemingly dysfunctional practices, such as “masculinity contests,” which reward employees more likely to buy into ethically dubious activities that range from predatory lending to sexual harassment. This Article maintains that questioning the presumption of legitimacy has profound and largely unexplored implications for corporate theory and anti-discrimination law. It extends the theory of “control fraud” central to white-collar criminology to a new concept of “control predation” that includes conduct that is ethically objectionable, if not necessarily illegal. This Article concludes that only by questioning the legitimacy of these practices in business terms can gender theory adequately address women’s workplace equality.

May 5, 2020 in Business, Equal Employment, Masculinities | Permalink | Comments (0)

Monday, April 27, 2020

Online Meetings Exacerbate Gender Inequities in the Workplace of Mansplaining and Interruptions

Mansplaining and Interruptions: Online Meetings Exacerbate Gender Inequities in the Workplace

Women across the nation are experiencing a unique side effect of coronavirus: their voices being drowned out.

 

Mita Mallick is the head of diversity and inclusion at Unilever, an international consumer goods company. In a recent interview with the New York Times, she said she was interrupted multiple times at a weekly virtual team meeting. 

 

“I’m interrupted, like, three times and then I try to speak again and then two other people are speaking at the same time interrupting each other,” said Mallick.

 

Mallick’s title of inclusion doesn’t mean anything if she can’t get a word in—and no, men are not facing similar problems. Studies show that, in meetings, men speak more often and dominate conversation. Their presence is seen as powerful and elite, while women are seen as incompetent.

 

Mallick’s experience is not unique—so much so that a popular term was coined to describe this phenomenon: mansplaining. “Mansplaining” describes a man oversimplifying common concepts to women in a degrading or condescending tone. Use it in a sentence? Women experience the act of mansplaining six times a week at work

 

Women and mansplaining have been together formally since Rebecca Solnit’s 2008 essay, “Men Who Explain Things,” when she coined the term (after a man tried to explain her own book to her)—but men’s condescending behavior towards women, specifically to feel more dominant in social settings, has been around for decades

 

Most recently, there was the slightest ounce of hope that the digital, remote workplace—forced by COVID-19 pandemic—would make the problem of mansplaining a little bit better. Perhaps the act of everyone behind a camera with buttons to push “mute” and “unmute” would civilize meetings and provide equal speaking time for all.

 

News flash: It didn’t. 

 

Deborah Tannen, a Georgetown University professor of linguistics and the author of eight books on women and men in the workplace, knew that Zoom conferencing and other forms of remote working wouldn’t change the problem and probably make mansplaining and male conversation domination worse.

 

In person, “women often feel that they don’t want to take up more space than necessary so they’ll often be more succinct,” said Tannen.

 

Online platforms allow men to mansplain, interrupt and dominate meetings more—and now more than ever before, women can’t get a word in.

 

While being succinct automatically makes our time on video shorter, men often take women’s ideas and run with it. It’s an ownership problem too.

In her research, Tannen found that many of the inequities in meetings can be boiled down to gender differences in conversation styles and conventions. That includes speaking time, the length of pauses between speakers, the frequency of questions and the amount of overlapping talk. More often than not, men and women differ on almost every one of those aspects, Tannen said, which leads to clashes and misunderstandings.

Men don’t just talk more—they talk louder. Not surprisingly, men who speak more and louder tend to be seen with more power and as such in dominant positions. Experts believe they enjoy the opportunity to explain things to women because they perceive it makes them seem smarter and in authority. 

 

“Whatever the motivation, women are less likely than men to have learned to blow their own horn,” according to Tannen, “and they are more likely than men to believe that if they do so, they won’t be liked.”

April 27, 2020 in Business, Pop Culture, Technology, Workplace | Permalink | Comments (0)

Friday, March 27, 2020

Confronting and Debunking the Common Reasons Given for Slow Progress for Gender Equity in Corporate Leadership

Kellye Testy, From Governess to Governance: Advancing Gender Equity in Corporate Leadership, 87 G.W. Law Rev. 1095 (2019)

Even as corporate influence on every aspect of life continues to grow, women (overall, and especially women of color) remain woefully underrepresented in corporate governance roles, particularly on boards of directors. This lack of gender diversity in the corporate boardroom is prevalent not only in more established companies but also persists — often at even higher levels — in new ventures as well. This Essay details the persistent lack of progress over more than a half century in diversifying leadership in corporate governance. This progress is especially concerning given that the benefits of diversity for sound decision-making and overall corporate welfare have been established empirically, putting into question whether those boards that fall short on gender equity are meeting their fiduciary duties of good governance. The Essay confronts and debunks the common reasons given for slow progress and outlines specific steps that corporate boards and others seeking to improve gender equity in corporate governance can deploy to make faster and more consistent progress.

This Essay is part of the George Washington Law Review's 2018 symposium, Women and Corporate Governance: A Conference Exploring the Role and Impact of Women in the Governance of Public Corporations.

March 27, 2020 in Business, Equal Employment, Workplace | Permalink | Comments (0)

Wednesday, March 18, 2020

The Use of Sex as a Proxy for Interest in Predictive Algorithms

Deborah Hellman, Sex, Causation, and Algorithms: Equal Protection in the Age of Machine Learning,  98 Wash.U. L. Rev. (forthcoming 2020)

U.S. constitutional law prohibits the use of sex as a proxy for other traits in most instances. For example, the Virginia Military Institute [VMI] may not use sex as a proxy for having the “will and capacity” to be a successful student. At the same time, sex-based classifications are constitutionally permissible when they track so-called “real differences” between men and women. Women and men at VMI may be subject to different training requirements, for example. Yet, it is surprisingly unclear when and why some sex-based classifications are permissible and others not. This question is especially important to examine now as the use of predictive algorithms, some of which rely on sex-based classifications, is growing increasingly common. If sex is predictive of some trait of interest, may the state – consistent with equal protection – rely on an algorithm that uses a sex-based classification?

This Article presents a new normative principle to guide the analysis. I argue that courts ought to ask why sex is a good proxy for the trait of interest. If prior injustice is likely the reason for the observed correlation, then the use of the sex classification should be presumptively prohibited. This Anti-Compounding Injustice principle both explains and justifies current doctrine better than the hodge-podge of existing rules and concepts and provides a useful lens through which to approach new cases.

March 18, 2020 in Books, Business, Constitutional, Gender, Theory | Permalink | Comments (0)

Monday, March 9, 2020

CA Gender Quota for Corporate Boards is Working, as Mandates Increase and More States Consider Similar Legislation

A Push to Get More Women On Corporate Boards Gains Momentum

Among the largest 3,000 largest U.S. publicly traded companies, only about one in five board members are women, according to Equilar, which tracks corporate governance data. And it says nearly one in 10 boards have no women.

 

In 2018, California became the first state to mandate gender diversity in boardrooms with the passage of a bill called SB 826. The measure, requires publicly traded companies based there to have at least one female board director — or face a $100,000 fine.

 

At the time, the bill's sponsor, State Sen. Hannah-Beth Jackson, called it a "giant step forward for women." Multiple studies show that corporations with female directors are more profitable, Jackson noted.

 

If supercharging the push toward gender parity on boards was the goal, it appears to be working.

 

The nonprofit advocacy group 2020 Women on Boards has been tracking changes at more than 400 major California companies. Before the law, 75 firms lacked a female board member, the group found. By the middle of 2019, two-thirds of those companies had added at least one woman to their boards. The law gave companies until Dec. 31, 2019, to comply.

 

A report this month by the California secretary of state found that 282 publicly held corporations in the state reported compliance with the law, up from 173 in July 2019.***

 

TheBoardlist, a database that companies can search to find female directors, has experienced a 20% increase in inquiries — and not just in California.

 

"I think there was this halo effect simply because the topic has been discussed so much more in the last year or two," said Shannon Gordon, CEO of theBoardlist. "Companies are kind of coming around to the value of diversity on boards."

 

In January, Goldman Sachs CEO David Solomon turned heads when he announced that this summer, the bank will stop taking companies public in the U.S. and Europe unless they have at least one diverse board member.***

 

But in the year since its passage, critics have lodged a handful of lawsuits challenging California's law on grounds that it's discriminatory.

 

The Pacific Legal Foundation sued California in November on behalf of electronics manufacturer OSI Systems shareholder Creighton Meland, a retired corporate lawyer. The suit argues that California's gender mandate for boards is unconstitutional.

 

"The law violates the 14th Amendment's promise of equal treatment before the law. And it actually forces people to make decisions on the basis of sex," said Anastasia Boden, a senior attorney at the Pacific Legal Foundation.

 

Plus, Boden says, mandating gender diversity ultimately hurts women "by relegating them to quota hires and making them seem like space fillers."

 

As the data trickles in on the first full year of California's law, companies are now looking ahead to complying with the second leg of the law. By the end of next year, it calls for California-based companies to have at least two female directors on five-member boards, and at least three female directors on boards with six or more members.

 

The law cites studies showing that having a critical mass creates an environment where women are no longer viewed as outsiders.

 

"There's a 30% rule. When you have a minimum of 30%, that's when you see a transformation of culture and a true transformation of how business operates," says Shelley Zalis, CEO of The Female Quotient, a company aimed at advancing gender equality. "But we have to start somewhere."

March 9, 2020 in Business, Constitutional, Gender, Workplace | Permalink | Comments (0)

Wednesday, February 19, 2020

New Research Shows Bringing Up Past Injustices Against Women Alienates Men, Making Reform More Difficult

Ivona Hideg & Anne Wilson, Research: Bringing up Past Injustices Make Majority Groups Defensive, Harvard Bus. Rev. 

Many organizations and institutions reference past injustices with the intention of making people more sensitive to how historic systems of oppression contribute to present-day inequalities. By drawing on social identity theory, however, we speculated that excessive focus on historical injustices can actually backfire by causing key groups to deny current discrimination and withdraw support for ongoing remediation programs.

 

Social identity theory posits that people derive some of their sense of identity and self-worth from their group memberships (including gender, race, religion, politics, or even sports teams), and are highly motivated to maintain and protect a positive image of their social groups. Just as an individual’s self-image can be shaken by reflecting on their own misdeeds, threats to social identity may arise when contemplating past misconduct by their group. This threat can lead to defensive behavior that diminishes or deflects perceived criticisms. As the historically-advantaged group, social identity theory predicts men will react defensively when presented with evidence of past injustices suffered by women, the disadvantaged group.

 

We tested these ideas through our recent research.***

 

These converging results suggest invoking past discrimination can threaten men’s social identity and undermine their perceptions of current levels of discrimination, consequently lowering their support for policies meant to ameliorate this situation.

 

What might be done to mitigate these negative effects? Must we sidestep these discussions of current groups’ shameful history, sacrificing its capacity to enrich our understanding for fear of triggering defensive backlash? Rather than simply avoiding discussions of the past, we reason that historically-advantaged groups (men, in these studies) might be more open to information about past injustices if there was a way to lessen the threat to their social identity.***

 

This work has important implications for policy-makers and organizations seeking to implement diversity and equity policies. Despite the intuitive appeal of using past injustices to bolster the case for such initiatives, this approach can undermine progress by threatening the social identity of key participants. As the efficacy of diversity and equity programs depends on establishing broad-based support, getting both men and women to view these policies positively should be considered an important pre-condition for success.

February 19, 2020 in Business, Gender, Pop Culture, Theory | Permalink | Comments (0)

Thursday, February 6, 2020

Third Circuit Upholds Philadelphia Ban on Employers Asking About Salary History Against First Amendment Challenge

Appeals Court Sides with Philly on Salary History Ban

In a decision that could have national implications for the wage equity movement, a federal appeals court Thursday sided with the city of Philadelphia, saying it can ban employers from asking job applicants their salary history.

 

The U.S. Court of Appeals for the Third Circuit partly reversed a 2018 lower court decision that said the city could not ban employers from asking about salary history, but could ban them from relying on it to set wages. The Greater Philadelphia Chamber of Commerce sued the city after the law was passed in 2017, claiming it violated the commercial-speech rights of employers.***

 

The 67-page unanimous opinion, representing the three-judge panel, was written by Judge Theodore McKee, who wrote that while the provision does limit employers’ speech, it is “only because that limitation prevents the tentacles of any past wage discrimination from attaching to an employee’s subsequent salary.”***

 

Philadelphia was the first city in the country to pass such a ban, following a statewide ban in Massachusetts. More than a dozen states and municipalities followed suit, including New Jersey.

 

February 6, 2020 in Business, Equal Employment, Legislation, Workplace | Permalink | Comments (0)

Monday, February 3, 2020

Payday Lending Regulations and the Disproportionate Impact on Women of Color

Lara Sofia Romero, Rafael Romero, & Sim Jonathan Covington, Payday Lending Regulations and the Impact on Women of Color, Accounting & Taxation, v. 11 (1) p. 83-92

Payday loans, or small short-term loans that carry high fees, may provide a much-needed safety net for some consumers in need of quick cash for emergencies. However, data suggest that most payday loan borrowers become repeat users caught in a cycle of high-cost debt. Furthermore, empirical evidence suggests consistent overrepresentation of women of color, including many single mothers, among payday loan borrowers. Based on international human rights law, the U.S. has an obligation to remedy predatory economic practices such as a payday lending that have a disproportionately negative economic effect on women of color. Posing the issue of payday lending as a human rights issue can make an important contribution to public action on how to address the aftermath of the financial crisis and its impact on women of color.

February 3, 2020 in Business, Poverty, Race | Permalink | Comments (0)

Wednesday, January 29, 2020

Studying Women's Beliefs as to Whether STEM Leaders Think Women are Bad at Doing Science

Andrew Dustan, Kristine Koutout & Greg Leo, Beliefs About Beliefs About Gender

Do women believe that leaders in science, technology, engineering, and math (STEM) fields believe that women are bad at doing science? Such beliefs about beliefs—second order beliefs—could drive women to sort out of STEM fields, leading to the observed gender gap in employment (Beede et al., 2011). Importantly, this belief-driven sorting could occur regardless of leaders’ true beliefs about women’s scientific abilities. When historically persistent beliefs about the differences between men and women—first-order beliefs—cause disparities, they may generate second-order beliefs that perpetuate those disparities even once first-order beliefs change. To facilitate investigating questions of this nature, we develop an incentive-compatible
experimental framework for measuring first- and second-order beliefs about the difference in any quantifiable characteristic between any two populations. We implement this procedure in a lab experiment to elicit beliefs about men’s and women’s performance on a timed math task and choices in an abstract bargaining task.

We find an interesting contrast between first- and second-order beliefs. There is no evidence that men’s and women’s first-order beliefs differ; however, both men and women believe that such differences exist. While a large majority of people believe that most men believe men outscore women on the math task, the majority also believe that most women do not share this belief. In the bargaining task, we again find that people believe that men and women hold different first-order beliefs even though we observe no such differences in the data. In summary, even when men and women have similar first-order
beliefs, second-order beliefs about men and women can vary substantially.

January 29, 2020 in Business, Gender, Science | Permalink | Comments (0)

Friday, January 17, 2020

Challenging the Idea that Non-Compete Agreements Exacerbate the Innovation Gender Gap

Amy Madi & Lisa Ouellette, "Policy Experiments to Address Gender Inequality Among Innovators" 
Houston Law Review, Forthcoming

In her Frankel Lecture, Professor Orly Lobel has set forth an intriguing hypothesis: that non-compete agreements, non-disclosure agreements, and other legal restrictions on employee exit and voice exacerbate the innovation gender gap. The unequal participation of women in science, technology, and innovation is an issue of increasing concern for many public- and private-sector stakeholders, and those interested in increasing innovation by women would be well advised to consider Lobel’s ideas. But as we emphasize in this Commentary, the underlying causal mechanisms for inequalities among innovators remain highly contested, and policymakers should not overstate the existing evidence for potential interventions out of a desire for rapid progress. Nor should they use this lack of evidence as an excuse for inaction. Rather, we argue that institutions interested in this issue should look for opportunities to rigorously and transparently test the most promising interventions.

January 17, 2020 in Business, Equal Employment | Permalink | Comments (0)

Monday, January 13, 2020

The Use of Agency Law for Married Women's Business Rights in Historic Nantucket

Mary L. Heen, Agency: Married Women Traders of Nantucket, 1765-1865, 21 Georgetown J. Gender & Law (2019)  


Before the enactment of separate property and contract rights for married women, generations of married women in seaport cities and towns conducted business as merchants, traders and shopkeepers. The first part of this article shows how private law facilitated their business activities through traditional agency law, the use of powers of attorney, trade accounts and family business networks. These arrangements, largely hidden from public view in family papers, letters, and diaries, permitted married women to enter into contracts, to buy and sell property, and to appear in court. Private law, like equity, thus provided a more flexible alternative to the common law of coverture under agreements made within the family itself. On the other hand, public law proved much more restrictive for wives who were not part of a viable or harmonious marriage. In post-revolutionary Massachusetts, for example, the feme sole trader statute and various judicially adopted exceptions to coverture applied only to certain wives abandoned by their husbands.

The second part of the article provides a case study of three generations of married women traders from Nantucket during the whaling era, the oil exploration business of its time. Their stories show how some married women, within the constraints of the law as it developed in Massachusetts without courts of equity, attained a form of autonomy in business or commercial activity at the same time that they fulfilled their family responsibilities. Their stories also uncover tensions underlying the first wave of women’s rights reform efforts in the mid-nineteenth century, including the developing separation between work and home that continues to pose challenges for family law and for men and women today. In a broader sense, this historical study also illuminates the interaction among private law, public law, and evolving social practice as the law both reinforced and shaped family roles during a period of increased commercialization and industrialization.

January 13, 2020 in Business, Family, Legal History | Permalink | Comments (0)

Friday, December 13, 2019

Improving Gender Diversity in Corporate Boards with Term Limits

Board Diversity by Term Limits?

Gender diversity in the U.S. corporate world is shockingly low. As The New York Times reported, fewer women run large corporations than CEOs named John. Boardrooms also lack diversity. While 86% of directors participating in PwC’s annual director survey stated they felt that women should comprise between 21% and 50% of the board, only 28% of Russell 3000 boards have more than one-fifth of their board comprised of women. Some U.S. boards do not even try to include women: 76 of the largest 1,500 Russell 3000 companies have not had any female directors in the past decade.

The investor community has made board diversity a recent point of emphasis. State Street, Vanguard, and Blackrock have all voiced their commitment to gender diversity, followed by recent support from proxy advisors. California has ventured even further, passing legislation that mandates specific quotas for women on Californian corporations. New Jersey and Illinois may soon follow suit. Diversity mandates, however, confront substantial legal, economic and societal challenges.

What if companies could advance gender diversity without explicitly regulating diversity at all? Our recent article, Board Diversity by Term Limits? forthcoming in the Alabama Law Review, explores how the use of director term limits can promote gender diversity in boardrooms, avoiding quota controversies altogether. While term limits have often been invoked as a tool to improve director independence and board oversight, they may be also effective in improving diversity. We demonstrate the negative correlation between incumbency and diversity to support our findings. Director turnover in the U.S. remains very low. Firms hesitate to force out incumbents, who typically believe they contribute to the firm in unique and essential ways. Furthermore, although perhaps not averse to the idea of hiring a woman, these leaders will eventually search among potential replacements for people whose skills mirror their own. The cycle self-perpetuates, locking women out of opportunities.

Our article explores this aforementioned connection between term limits and board diversity. Drawing upon quantitative data on director turnover in the S&P 1500 and qualitative data on S&P 500 firms with term limits, our research shows that firms experiencing higher board turnover have more gender diversity. A regression analysis of the S&P 1500 companies over the 2010-2016 period shown in Table 1 below depicts how a decrease in average board tenure correlates significantly with an increase in gender diversity. Conversely, a one-year increase in average board tenure results in a 0.24 percentage point decrease in female board percentage.

December 13, 2019 in Business, Gender | Permalink | Comments (0)

Wednesday, November 27, 2019

How a Credit Card Can be Sexist

Can a Credit Card be Sexist?

The Apple Card controversy illustrates how a history of bias in credit lending, coupled with discriminatory AI algorithms, hurt women

{T]he New York Department of Financial Services, prompted by Hansson’s tweets, announced it would open an investigation into whether Goldman Sachs discriminates on the basis of sex in the way it sets its credit limits. “Any algorithm that intentionally or not results in discriminatory treatment of women or any other protected class violates New York law,” a spokeswoman for the agency said in a statement Saturday.

 

Apple has deferred to Goldman Sachs for requests for comment. Andrew Williams, a spokesperson for the bank, said in a statement that Apple Card applications are “evaluated independently.” The company evaluates an individual’s income and an individual’s creditworthiness, which “includes factors like personal credit scores, how much personal debt you have, and how that debt is managed.”

 

“We have not and will not make decisions based on factors like gender,” Williams said. He added that the company is looking to enable joint family accounts in the future.***

 

The story illustrates how potential biases in credit lending manifest: On the one hand, women have long lacked credit parity with men — women only received legal protection from credit discrimination in the 1970s. But today, with the rise of AI algorithms determining everything from credit lending to hiring to advertising, women face another potential source of discrimination.

 

“These algorithms are trained on data that are a reflection of the world we live in or the world we lived in in the past,” says Meredith Whittaker, a research scientist at New York University and co-founder of the university’s AI Now Institute. “This data irreducibly imprints these histories of discrimination, these patterns of bias.”

 

That discrimination is “intersectional,” Whittaker says, and disproportionately hurts women of color.

***

 

Well into the 20th century, women struggled to get approved for credit cards. As the Smithsonian reports, any woman looking to open a card was subject to discriminatory questions — whether she was married, if she planned to have children. Many banks required single, divorced or widowed women to bring a man along with them to cosign for a card.

 

It wasn’t until 1974 that the Equal Credit Opportunity Act made it illegal for any creditor to take gender, race, religion or national origin into account. But discrepancies still exist today. An analysis from the Federal Reserve found that single women under 40 had lower credit scores than comparable single men, which reflected that single women had “more intensive use of credit” — an outcome, the study author notes, that may reflect economic circumstances, employment and “men and women being potentially treated differently by the credit market and institutions.” As many note, women’s lower credit is also tied to the gender pay gap.

November 27, 2019 in Business, Gender, Pop Culture | Permalink | Comments (0)

Friday, November 1, 2019

Study Finds Corporate Boards with All-Male Directors Suffer More Negative Stock Price Reactions from MeToo Claims than Those with Three or More Women Directors

Mary Brooke Billings, April Klein & Crystal Shi, Investors’ Response to the #MeToo Movement: Does Corporate Culture Matter? 

This paper provides evidence that the #MeToo movement revised investors’ beliefs about the cost of fostering a culture that excludes women, as reflected by the absence of women directors in the board room. In particular, we document an overall negative market reaction tracking the timeline of events associated with the #MeToo movement, beginning with the Harvey Weinstein exposé in October of 2017 in the New York Times. This negative response concentrates in firms that have traditionally excluded women from their boards. In contrast, for companies that embrace the inclusion of women on their boards, this negative effect is moderated. Overall, investors appear to have revised their beliefs about the risks associated with future revelations of misconduct, and also about the value of having women in the board room shaping the culture of the firm.

Excerpt:

Consistent with the view that the potential revelation of sexual misconduct in the workplace injects risk into publicly listed firms, we report an overall average cumulative abnormal return of -4.57%. We also note that 24 of the 37 days recorded significantly negative abnormal returns across all firms and, in fact, we detect significantly negative abnormal returns for each of the final 11 events on the #MeToo event timeline. This supports the notion that as the movement gained momentum, investors revised their beliefs about the potential impact of the movement.


This overall negative reaction to the #MeToo movement is borne out by subsequent responses by firms and Wall Street in general. Over 200 male executives were dismissed or demoted following allegations of sexual misconduct, with many of these men being replaced by women executives (Bach 2018, Carlsen et al. 2018). Attorneys have added “Weinstein Clauses”
and “#MeToo representations” into merger documents, which require target firms to be held financially responsible via “clawback” provisions for revelations of sexual misconduct after the deal is closed (Ahmed 2018, Reints 2018).


Cross-sectionally, we expect variations in market reactions to unfolding #MeToo events to be directly related to the market’s assessment of (1) how likely a firm is to have a past or future allegation of sexual misconduct revealed and (2) how well a firm is equipped to deal with these revelations. We predict and find evidence that variations in abnormal market returns are related to the gender composition of a corporation’s board of directors. Specifically, firms with boards made up exclusively of male directors suffer more negative stock price reactions, while firms with boards that include three or more women experience moderated stock price reactions.

November 1, 2019 in Business, Equal Employment | Permalink | Comments (0)

Friday, September 13, 2019

New IL Law Bars Employers from Asking Job Applicants about Pay History

New Law Will Bar Illinois Employers From Asking Job Applicants for Pay History (July 31, 2019)

Illinois companies will no longer be allowed to ask job applicants or their previous employers about salary history under a measure Democratic Gov. J.B. Pritzker signed into law Wednesday.

 

Advocates say asking applicants about their salaries at previous jobs helps perpetuate a wage gap between men and women doing the same jobs. Illinois lawmakers passed two previous versions of the legislation, but Pritzker’s predecessor, Republican Gov. Bruce Rauner, vetoed both. ***

 

The measure Pritzker signed, which takes effect in 60 days, passed with bipartisan support this spring in the House and Senate. Workers will be able to seek up to $10,000 in damages if employers violate the law, and it also protects the right of employees to discuss their salaries and benefits with co-workers.

September 13, 2019 in Business, Equal Employment | Permalink | Comments (0)

Monday, September 9, 2019

Excluding Gender from Credit Application Automated Calculus Increases Credit Rejection for Women

Stephanie Kelley & Anton Ovchinnikov, "(Anti-Discrimination) Laws, AI and Gender Bias" 

We use state-of-the-art machine learning models trained on publicly available data to show that the data governance practices imposed by the existing anti-discrimination laws, when applied to automated algorithmic (“AI”) decision-making systems, can lead to significantly less favourable outcomes for the minority classes they are supposed to protect. Our study is set in the domain of non-mortgage credit provision, where the US and the EU laws prohibit the use of Gender variables in training credit scoring models; the US law further prohibits the collection of Gender data. We show that excluding Gender as a predictor has little impact on the model accuracy and on outcomes for males (the majority) but leads to a 30-50% increase in credit rejection rates for females (the minority). We further show that rebalancing the data with respect to Gender, prior to training models can significantly reduce the negative impact on females, without harming males, even when Gender is excluded from the credit scoring models. Taken together, our findings provide insight on the value of transparency and accountability, as opposed to prohibition for ethically managing data and AI systems, as societies and legal systems adapt to the fast advances in automated, AI-driven, decision making. Additionally, we hope that performing the analyses in a verifiable, open-access way, as we did, will facilitate future inquiries from other researchers and interested public into this critically-important societal issue.

September 9, 2019 in Business, Gender | Permalink | Comments (0)

Overhauling Employment Practices in the Wake of MeToo

Kerri Lynn Stone, Competing Interests and Best Practices in the Wake of #MeToo, JOTWELL

Reviewing Rachel Arnow-Richman, Of Power and Process: Handling Harassers in an At-Will World, 128 Yale L.J. Forum 85 (2018).
 

One of my favorite pieces published in labor and employment law this year is Rachel Arnow-Richman’s Of Power and Process: Handling Harassers in an At-Will World, which is a not-to-be-missed call for an overhaul of the contracting practices deployed by employers, one designed to shift the calculus that employers use to police sexual harassers of various corporate ranks. This piece examines a rarely thought-about angle of the #Metoo movement and the changes that it has precipitated and is yet to still effect. Professor Arnow-Richman, a scholar in employment law and in contract law, exposes this angle thoughtfully and sets forth a laudable proposal.

Professor Arnow-Richman’s starting point is, appropriately, as she puts it, the “extreme power imbalance in the workplace” that engenders “a world in which high-level decision-makers wield unrestricted control over employees,” while the entity can turn a blind eye to the way in which this unfettered discretion may be abused. (P. 90.) Lower-level employees are not accorded such latitude, and they are typically expeditiously disciplined or otherwise dealt with in the face of their inappropriate behavior. The #MeToo Movement, Professor Arnow-Richman correctly points out, was the force that kicked up a lot of the dust that enabled us to see just how uneven this landscape has been. Specifically, she argues that as society begins to grapple with balancing aggressive policing of workplace harassment with ensuring that accused harassers are accorded fair treatment (rather than summary and automatic dismissal), it needs to address inequities among workers at different ranks in the workplace. Moreover, she notes, misconceived corporate responses have companies punishing sexualized actions, rather than policing sex-based harassment that is not sexual in nature. Having astutely pointed out that “employers are inclined to tolerate sexual harassment and other misconduct by top-level employees but aggressively police ‘inappropriate’ behavior by the rank-and-file” (P. 85), Professor Arnow-Richman then sets out to address this problem.

This piece is both important and timely

 

September 9, 2019 in Business, Equal Employment, Workplace | Permalink | Comments (0)