Impact of Women Executives on Litigation and Lawsuits in Firms

Running head: ACCOUNTING RESEARCH
Accounting Research
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Abstract:
A detailed research on firms and entities operating around the globe have thrown some
interesting facts about the participation of women executives and managers in the day to day
affairs of firms and its impact on the law suits and other trouble issues faced by entities in
general. Firms where women have more powers and are in executive positions have relatively
less number of litigation pending against them as compared to firms where women are not in
power. As per the study it is not that the female executives show greater willingness to settle law
suits and litigations against the firms but rather the cautious approach of female executives in
avoiding risky but valuable business policies. Entities with female executives at the top of the
hierarchies have avoid aggressive R&D, aggressive marketing campaign and other such policies
with significant risks.

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Contents
Abstract:...........................................................................................................................................1
1. Introduction:.............................................................................................................................3
2. Risk preferences of executives and its affects:.........................................................................5
2.1. Testing of the hypothesis:.................................................................................................5
2.2. Characteristics of executives on the basis of gender:.......................................................6
2.3. Expected to be faced with much less trouble in case the top executives are female:.......7
2.4. Measurement of women powers:......................................................................................7
2.5. Lawsuits filed against S&P 1500 firms between 2002 and 2011:....................................8
2.6. Findings from the study are consistent with the hypothesis:............................................9
2.7. Mechanisms at work in reduction of law suits:...............................................................10
2.8. Uncovering the underlying policies that affect the law suits:.........................................11
3. Firms hiring women executives:............................................................................................12
4. Data analysis along with variables:........................................................................................13
4.1. Sample and data:.............................................................................................................13
4.2. Variables in the base line analysis:.................................................................................14
5. Empirical analysis:.................................................................................................................15
5.1. Descriptive statistics:......................................................................................................15
5.2. Whether firms with women managers face less law suits:.............................................18
5.3. Relationship between female executives and law suits:.................................................18

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5.4. Women executives on settling in an organization:.........................................................18
6. Conclusion:.............................................................................................................................19
References..................................................................................................................................19

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1. Introduction:
The concept of women working within the four walls of the house has come to its decline due to
a rapid increase in the westernization and modernization of the third world nations. Due to the
drastic changes in the family type and bonding with the affinal kins, society has come across a
major change related to the concept of roles played by the women. Increase in the percentage of
females completing higher education and earning a living has pushed the society to rethink on
the abilities of the women regarding their roles played in the corporate world (Abbott, Mugisha
& Sapsford, 2018). There have been a lot of evidences of change in traditional ideas about
masculine and feminine gender identities. Females often have better communication skills than
males, and these are the skills which are required for success in the new service economy. Over
the years the growth of the women in the workplace has strengthened. It is observed that women
are taking more prominent roles in the business market and making major breakthrough in the
corporate world. Qualities like self- awareness, emotional atonement, humility and authenticity
are seemed to be the major strengths of the women that contribute to their leadership abilities
which have created room for them to excel in their workplaces (Asemi, Safari & Asemi Zavareh,
2011).
Over the recent year’s research that has been conducted on the gender diversity in the
workplaces shows that company with more women at the top make more net margins. The
Peterson Institute for International Economics, a Washington DC- based think tank completed a
survey of 21,980 firms from 91 countries found that having women at the C-Suite level
significantly increases net margins. It is also found that in the 63- year history of Fortune 500,
there are more women running Fortune 500 business today. Of course not all women have the

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same leadership qualities but generally women seem to bring in strong work ethic and motivate
the team. They carry out the company standards and goals and make sure colleagues follow the
same values. According to the Peterson Institute, the impact of putting women in charge like
having female senior leaders creates less gender discrimination in the process of recruitment,
promotion and retention (Bhatia, 2012).
In a world which is largely dominated by men women are often neglected in different sphere of
lives despite having necessary qualifications and skills to compete with its opposite gender.
However, the times are changing rather quickly with women now conquering different fields
with equal rate of success as men. In fact in many cases the women have showed that they are at-
least equal if not more talented to do certain jobs than men. Corporate and business entities are
quickest in realizing the ability of women in running business operations with significant ease
and calm. As a result corporate entities have started appointing female executives in the boards
to ensure smooth and effective functioning of such entities. Companies are frequently faced with
number of troubles including law suits and litigation cases against them which are filed by
various different parties including their stakeholder in some cases (Doran & Gunn, 2015).
Companies such Walmart, Amazon, Facebook, Apple, Samsung and other such multinational
companies often face more than 1000 law suits on an average in each year. In fact Walmart on an
average faces 5000 small and large lawsuits each year by different parties including customers,
employees, suppliers, competitors, government agencies and social groups in some cases.
Similarly Apple and Samsung face more than 1000 cases on average in every year on issues
related to infringement of technology. The lawsuits mainly arises due to the policies and
strategies used by these firms to maximize their revenue and profits from business operations. In
order to pursue these profitable policies and strategies firms have to assume certain amount of