A CEO can spend years studying markets, competitors and balance sheets. But according to an intriguing line of research, one of the influences that may shape how some of these powerful executives run their companies could be sitting at the family dinner table: their daughters.Research has found that companies led by CEOs who have daughters tend to have higher corporate social responsibility ratings, with the strongest differences appearing in areas such as diversity, employee relations and environmental practices. The finding has been described as a possible “daughter effect” and has attracted attention on how fatherhood may influence CEO leadership.The idea goes back to research by Henrik Cronqvist and Frank Yu titled Shaped by their daughters: Executives, female socialization, and corporate social responsibility. Published in the Journal of Financial Economics in 2017, the study examined CEOs of major US public companies and asked a surprisingly personal question: does having a daughter influence the way a CEO makes corporate decisions?
What did the study find?
The researchers found that firms whose CEOs had daughters had CSR ratings about 9.1% higher than a median firm. The effect was particularly strong in diversity, while environmental policies and employee relations also contributed to the difference.The researchers also estimated that the median company led by a CEO with a daughter spent an additional 10.4% of annual net income on corporate social responsibility programmes.That does not mean that every father of a daughter suddenly becomes a more socially conscious leader. The study found an association between having a daughter and corporate behaviour, rather than proving that daughters directly cause CEOs to change.
Why might having a daughter influence a CEO?
The researchers proposed a concept called female socialization.The basic idea is that children can shape their parents just as parents shape their children. A father raising a daughter may encounter, through everyday family life, experiences and perspectives that make issues such as gender inequality more personal.Instead of thinking about workplace diversity as an abstract corporate policy, for example, a CEO may begin to see it through the experiences of someone close to him.The study suggested that this could make CEOs more attentive to the interests of stakeholders beyond shareholders, including employees, women, minorities and the wider community.
Does having a daughter automatically make a CEO more progressive?
Not necessarily.This is where the “daughter effect” needs some caution. The study was observational and examined a specific population: CEOs of large US public companies during the period from 1992 to 2012. The researchers used several methods to address possible sources of bias, including examining first-born daughters and changes in CEOs within firms, but the findings still describe a relationship rather than a simple cause-and-effect rule.There are also plenty of other forces shaping corporate decisions: boards, shareholders, employees, regulation, economic conditions and the individual values of the CEO.So having a daughter is not a magic switch that transforms corporate culture.
Why is the finding still interesting?
Because it suggests that leadership may be influenced by something far more ordinary than a board meeting or management course.A daughter growing up, asking questions, encountering opportunities or barriers and developing her own view of the world may gradually change the way her father sees the same world.That possibility turns the usual parent-child relationship on its head. We often talk about parents passing values to children. The research suggests the influence can sometimes travel in the other direction too.And that may be the most interesting part of the “daughter effect”: the person influencing a CEO’s approach to equality and social responsibility may not work in the company at all. She may simply be his daughter.
