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Jury’s out on whether women are an ethical force

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Not long ago, it was the year of the whistle-blowing women — with Sherron Watkins of Enron, Cynthia Cooper of WorldCom and Coleen Rowley of the FBI being celebrated on the cover of Time magazine. It was tempting to speculate that if more women were in charge, they'd be an ethical force capable of transforming top management.

But more recent criminal cases, against Martha Stewart and Enron's Lea Fastow, have tempered those hopes. Clearly businesswomen can cross ethical and legal lines right alongside the men.

So where should corporate America turn in a post-Martha world? As more women move into boardrooms and corner offices, can they have a cleansing effect?

Welcome to a contentious debate with plenty of ifs and buts — and few hard facts.

There is some evidence suggesting a tantalizing link between women and ethical business behavior. But not everyone buys it — and even those who do often disagree as to why.

"There's a camp that argues women are going to bring a different perspective based on their historically and culturally accepted caretaking roles," says Debra Meyerson, professor of education and organizational behavior at Stanford University. "And there's another perspective that doesn't buy into this argument that women and men are different in some fundamental way."

Many tread carefully somewhere in-between. Advocates for appointing more women to corporate boards of directors say it would lead to better business practices — but not because women are inherently more ethical. "Because women have been outside most corporate boards for so long, as individuals they're bringing a new perspective. They're not necessarily just going to be one of the Greek chorus saying 'yes' to the CEO," says Toni Wolfman, chair of the corporate-board resource committee at The Boston Club, a professional women's group.

A 2002 Canadian study offers a rare glimpse beyond the anecdotes that are a staple of this debate. It found that 94 percent of corporate boards with three or more women ensured that their companies had conflict-of-interest guidelines, compared with 68 percent of all-male boards. When it came to verifying audit information, the figures were 91 percent vs. 74 percent, according to the Conference Board of Canada, an independent research group. The study doesn't claim a causal link, however, since it's possible that companies already engaging in such practices attract more women to their boards.

About 16 percent of board members in Canada are women. In Fortune 500 companies in the United States, it's about 14 percent. What's noteworthy about the Canadian study, Meyerson says, is that it looked at boards with more than two women. Research has shown that unless a minority group reaches a tipping point of about 15 percent representation, its members are under extreme pressure to conform to the majority. Women who have served on boards confirm that finding, saying men show greater respect for their views as individuals when there is more than just a token woman present.

"We're not asking you to put them on boards because they're women, but if you're looking for the best directors, you can't afford to ignore half the universe," Wolfman says.

As more women reach positions of power in the business world, some observers say, there will simply be equal opportunity for corruption.

Embezzlement statistics bolster this argument. In 2002, women committed slightly more embezzlement crimes than men. A recent New York Times analysis of federal data showed that between 1993 and 2002, embezzlement by women increased 80.5 percent to 5,917 (compared with 5,898 by men).

In the broader category of occupational fraud and abuse, men do commit 75 percent of the crimes, and they steal larger amounts of money — a median of $185,000 compared with $48,000 for women, according to a 2002 report by the Association of Certified Fraud Examiners. That's because more men hold high-level positions where they can manipulate financial statements, argues Kyle Anne Midkiff, a certified fraud examiner and principal at Nihill & Riedley P.C. in Philadelphia.

Women tend to steal smaller amounts but over longer periods of time, Midkiff says. And women often collude to commit such crimes, she adds. "Women have the reputation of working together, and not worrying about getting all the credit — well, in this case, the attitude is, 'Let's share some of the embezzlement.' "

When it comes to integrating ethics and socially responsible values into business education, there's more receptivity among female students, says sociology professor Chrys Ingraham.

She and business professor Eileen Brownell recently launched a first-of-its kind program for undergrads at Russell Sage College, a women's school in Troy, N.Y. Before addressing basic business skills, they teach about foundational documents such as the Bill of Rights and the United Nations' Universal Declaration of Human Rights. They explore the relationship between businesses and communities in the United States and abroad. They see their program as a way to counter something often heard on TV's hit reality show "The Apprentice": "It's not personal; it's business."

"If you don't really see your actions in business as having an impact on people's lives, then you're wide open to ethical violations," Ingraham says.

She adds that her students embrace the opportunity to think beyond the traditional goal of making money.

"It's a mistake to make the assumption that business's starting point is honesty," Ingraham says. She knows of car dealerships, for example, where the norm includes "ripping people off," especially older customers. "If you think about how women are prepared to teach their children to be the good citizens of the future, there's a disconnect between the message in business and the message that's given to women. So when you bring women into business, you bring that same orientation. . . . Then, yes, you can say the chances of women being more ethical are higher."

Ingraham attributes this to women's socialization, but some speak of the differences as inherent. "Women by nature are very compassionate; they are the mothers of the future world, and they have those instincts naturally," says Nafeesa Koslik, a hotel manager and recent graduate of the Russell Sage program. She credits the program, however, with making her more aware of the needs of her employees, many of them single mothers who sometimes have to take an unexpected day off.

The notion that women are more ethical than men offends many. "The stereotype is that women are more concerned with how their actions will affect other people, and men are concerned with adherence to principles . . . and maintaining the pecking order," says Bruce Weinstein, president of Ethics at Work, a consulting firm in New York. "I find these kinds of distinctions grossly oversimplified and unfair to everyone."

Weinstein does agree with the Russell Sage professors that ethics in one's personal and professional lives shouldn't be thought of as separate.

"We tend to hear about ethical issues involving life-or-death struggles or matters of grave import . . . but any time we ask how will someone be affected by our decision, it's an ethical question," he says.