Sam Altman was recently fired as CEO of OpenAI by a board of directors that was composed of two men and two women. After days of back and forth, in which board members and top managers resigned and employees threatened to quit, Altman was reinstalled as CEO and a new board emerged – one composed of only men.
How does the exclusion of women from the new board affect the future of OpenAI? Our research suggests that the all-male composition of this board puts it at a significant disadvantage in its ability to guide the company through the ethical and safety challenges that lie ahead. Specifically, we found that corporate boards and leadership teams that lack gender diversity have a higher risk of engaging in unethical conduct.
Developing and deploying artificial intelligence technology safely and ethically is a vital – even existential – concern to us all. After the shakeup at OpenAI, its focus has seemingly changed from developing AI at a measured pace to rapidly developing and releasing AI technologies.
The two women who departed the OpenAI board were known to have a focus on the ethical considerations confronting the future of AI and were promoting a more cautious deployment of AI technologies with an eye toward safety. But even if they had been replaced with men with similar qualifications and priorities, our research shows that the very presence of women in leadership makes firms more committed to ethics.
Our research examined the relationship between the presence of women in firm leadership positions and on corporate boards and whether companies were prosecuted and penalized for unethical conduct. We used corruption prosecutions by the U.S. Government under the Foreign Corrupt Practices Act (FCPA) because an examination of these violations, which are based upon bribing public officials, is a good proxy for ethical behavior more generally. (Our data was limited to individuals’ public identity as a man or a woman in their corporate biographies.)
By comparing a sample of 140 publicly listed firms that were the targets of FCPA enforcement actions by the U.S. Securities and Exchange Commission to the same number of control firms that were not targets of FCPA enforcement actions, we found that firms with more women in top management teams and on corporate boards had a decreased propensity to engage in corrupt conduct.
These findings demonstrate a strong business case for gender diversity in leadership. More women in leadership is better for a company’s bottom line.
To be sure, we’ve all heard the tired suggestion that there is a lack of qualified women to fill leadership positions. As recently as 2019, when women comprised almost 51% of the U.S. population and 47% of the workforce, women held only 20% of board seats and 21% of C-Suite positions. When considering positions with a title of Senior Vice President or higher, women fared just a little better, at 26%.
In fact, the continuing disparity between the percentage of women in the U.S. population and the representation of women in corporate leadership roles is not due to a lack of qualified women. The data indicate that the opposite is true. Women outpace men in education, earning the majority of master’s and doctoral degrees awarded by U.S. institutions and almost half of the degrees in business at these levels. Data also show that women are no less committed to their careers than are men and are in every way as motivated as men to serve in leadership positions.
Our findings demonstrate a strong business case for gender diversity in leadership and good reason to turn around the disappointing lack of equity for women in higher corporate life. As OpenAI reportedly considers expanding its board in the coming months, it should right its mistake in failing to consider the gender diversity of its board and assemble a board that is representative of our population.
If OpenAI ignores the evidence of the benefits of gender diversity to its board, it does so at its peril – and considering the identified risks around the development of AI, the peril extends to us all. It turns out that the right thing for women is the right thing for companies – and the right thing for society.
