Adding Women to Corporate Boards Impacts the Efficiency of Product Recalls

A new study led by Kaitlin Wowak, assistant professor of information technology, analytics, and operations in the Mendoza College of Business at the University of Notre Dame in Indiana, finds that products that injure or kill consumers are recalled much faster when there are women on the board of the company that makes the product. In addition, the study found that lower-severity product defects that can be hidden from regulators and not recalled are less often hidden when there are women directors.

Researchers analyzed 4,271 medical product recalls from 2002 to 2013 across 92 publicly traded firms regulated by the Food and Drug Administration. The results showed that compared to boards composed of all male directors, those with female members announce high-severity recalls 28 days faster, a 35 percent reduction in recall timing. Additionally, the researchers found the more women on the board, the more efficient recalls become.

“Just one female director is insufficient to push firms to recall these serious problems more quickly,” Dr. Wowak noted. “It takes at least two female directors to influence the timeliness of severe product recalls, and three moves things along even faster. We believe our study shows that there is a difference in very real and important outcomes between firms who add women to their boards and those who don’t.”

Dr. Wowak is a graduate of the University of Florida, where she majored in finance. She holds a master’s degree in information systems from Johns Hopkins University in Baltimore and a Ph.D. in business administration from Pennsylvania State University.

The full study, “The Influence of Female Directors on Product Recall Decisions,” was published on the website of the journal Manufacturing & Service Operations Management. It may be accessed here.