Human Rights Violations
and the role of
Gender Diversity in the Board of Directors
Master Thesis Jolanda Rossel 10982744
MSc. in Business Administration – International Management University of Amsterdam - Amsterdam Business School Supervisor: Mw. Dr. M.K. Westermann-Behaylo
Second Reader: Dhr. Dr. J.P. Lindeque 17 January 2016
Statement of Originality
This document is written by Student Jolanda Rossel who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Table of Contents
1. Introduction ... 1
2. Literature Review ... 3
2.1. Human Rights ... 3
2.1.1. Development of Human Rights Responsibilities ... 4
2.1.2. The UN Guiding Principles of Business and Human Rights ... 7
2.2. Human Rights Due Diligence and Access to Remedy ... 10
2.2.1. Human Rights Due Diligence ... 11
2.2.2. Remedies for Human Rights Violations ... 12
2.2.3. Implementation of Human Rights Due Diligence ... 12
2.3. Gender Diversity ... 15
2.3.1. Moral Reasoning ... 17
2.4. Research Question and Hypotheses ... 19
3. Research Methodology ... 23
3.1. Research Design ... 23
3.2. Independent variable ... 25
3.3. Dependent variables ... 28
3.4. Methodology ... 30
3.4.1. Pearson Chi-square test ... 31
3.4.2. Logistic Regression Analysis ... 32
4. Results ... 34
4.1. Statistical Analysis of the Pearson Chi-square ... 34
4.2. Statistical Analysis of the Logistic Regression ... 36
4.4. Logistic regression analysis of Hypothesis 1b ... 37
4.5. Pearson Chi-square analysis of Hypothesis 2b ... 39
4.6. Logistic regression analysis of Hypothesis 2b ... 39
4.7. Pearson Chi-square analysis of Hypothesis 1c ... 41
4.8. Pearson Chi-square analysis of Hypothesis 2c ... 42
4.9. Results Summary ... 43 5. Discussion ... 44 5.1. Limitations ... 46 5.2. Future research ... 47 6. Conclusion ... 50 References ... 51
Abstract
There is increasing worldwide attention for human rights violations and the role of corporations. Ethical leadership and human rights due diligence are necessary for a corporation to effectively honor human rights. However, contradictory research exists on whether there are gender differences in ethically responsible behavior. This thesis contributes to this debate by quantitatively exploring the role of gender diversity in the Board of Directors on human rights violations and on the initiated corporate remedies for human rights
violations. The findings of this thesis suggest there are no differences in the occurrence of human rights violations when having gender diversity in the Board of Directors. Furthermore, the results suggest that gender diversity plays no role in the initiation of a corporate remedy for human rights violations. Unfortunately, the critical mass theory could not be tested in this thesis due to insufficient corporations with 30% or more women present on Boards.
Therefore, it is important to do further research on the critical mass theory, as Boards become more diverse. Nevertheless, the fact remains that the need for conducting ethically responsible human rights due diligence and the protection of human rights is of great importance all over the world and that there are still opportunities for improvements.
KEY WORDS: diversity, gender, human rights, violations, remedy, due diligence, UN Guiding Principles of Business and Human Rights, moral reasoning, leadership, ethics.
1. Introduction
Child labor violations and sweatshop conditions (The Guardian, 2004), the BP oil spill in the Gulf of Mexico (BBC, 2010) or the oil theft and pollution in the Niger delta (Amnesty International, 2013). Human rights violations are an important discussion across the world as human rights are societal recognized, fundamental moral rights necessary to live a human life with dignity (Donnelly, 2013). According to Amnesty International (2015) the amount of human rights violations must be seen as a low point in the year 2014 so the following years can be improved. This makes Corporate Social Responsible (CSR) behavior of great importance in the prevention of human rights violations.
Mary Robinson, who was former United Nation’s High Commissioner for Human Rights, was one of the first to state that the actions of corporations have an influence on the “dignity and rights” of people (Arkani & Theobald, 2005, p.190). Before the 1990s there was little recognition for the role of corporations on human rights. Now, most executives believe that the protection of human rights is a joint effort of both corporations and government (The Economist Group, 2015). The 2011 UN Guiding Principles of Business and Human Rights represent the responsibilities of corporations and government with respect to the protection of human rights, which shifts the focus towards the implementation of the Guiding Principles.
There is a growing interest on how to best implement the Guiding Principles and therefore there is a growing interest in corporate human rights due diligence regarding the protection of human rights and the prevention of violations (Ruggie, 2011). Human rights due diligence can be expressed through human rights policies and effective remedies for human rights protection. The execution of business policies and remedies can vary among
corporations. Senior leadership has an influential role in the performance of CSR behavior of corporations (The Economist Group, 2015). Moreover, some researchers suggest that the
performance of ethically responsible behavior can depend on differences in gender (Stedham, Yamamura, & Beekun, 2007).
According to the International Labour Organization (2015), a rising number of women have a position in the Board of Directors. The increasing gender diversity in the Board of corporations might influence the performance of CSR through human rights policies and effective remedies for human rights violations, as the final responsibility lies at the Board of Directors (The Economist Group, 2015). Interestingly, no previous research is conducted in the field of human rights violations and gender diversity. This thesis aims to contribute to the understanding of the link between gender differences in the Board of Directors and ethically responsible behavior, by quantitatively testing the influence of gender diversity in the Board on human rights violations and on the initiation of remedies for human rights violations. These outcomes will be of importance as it creates insights into potential gender differences that might influence the remedies in the prevention of harm of human rights.
This thesis will be structured in a way that starts with a theoretical framework, continues with empirical research and finishes with a discussion of the results and a conclusion. The second chapter of the thesis will be the literature review. The literature review will discuss the background and importance of the developments in human rights, which will be followed with the role of corporations in the prevention against human rights violations by discussing the conduct of due diligence and effective remedies. The last section in the literature review will outline several theories on gender diversity and differences in gender on CSR behavior. The third chapter of this thesis will address the design and methodology of the conducted research and the fourth chapter will discuss the data and results. The fifth chapter of this thesis will elaborate on the connection between the theories and the results of this study in a comprehensive discussion and the last chapter is the
2. Literature Review
Human rights violations by corporations are a rising topic of discussion. The 2011 UN Guiding Principles of Business and Human Rights play an important role in the current state of attention towards human rights. The first section of this literature review will give
background information on human rights and will give insight into the history regarding the protection of human rights. The second section will address the attention corporations are increasingly giving to human rights in their value chains by discussing human rights due diligence and the necessity for effective remedies against human rights violations caused by corporations. The third section of the literature review will address several theories on gender diversity and the differences in gender on CSR behavior. The literature review will conclude with the research question, the objectives and the conceptual framework of the thesis.
2.1. Human Rights
Human rights are fundamental moral rights, and can be defined in many ways. In general, each definition contains at its core that it is about the life of human beings and treating them with respect, dignity, autonomy and freedom. One definition of human rights is that they are: “claims that are directly connected to the basic possibility of living a human life in dignity” (Wettstein, 2012, p. 741). Also, all human rights are universally applicable to everyone in the same manner and cannot be traded or renounced. In other words, human rights are inalienable and indivisible (Wettstein, 2012).
Human beings have moral rights, which can be categorized as positive and negative moral rights. Positive moral rights are active, often collaborative, actions created to
accomplish certain human rights. These mainly contain social, cultural and economic human rights, like the right to food or education. Negative rights are passive, universal duties that stem from the violation of human rights and are set up to address these violations (Waddock
obligation towards others to not trespass on private situations. Negative rights are
unambiguous and cannot be violated by anyone (Velasquez, Andre, Shanks, & Meyer, 2014). Moral rights are thus important for ensuring the protection and development of human rights.
Human rights violations can be defined as “an attack on the very constitution of humanity and as such it is to be condemned in all possible shapes and forms – this is the core of and the very purpose and meaning of the idea of inalienable human rights.” (Waddock & Wettstein, 2005, p. 313). A violation of human rights occurs when there is a conflict of interests. For example, in case of corporations this conflict of interest can be between the corporation and individuals, when the corporation wants to make profit at the expense of individuals. These situations can lead to unethical behavior. There are three main reasons to violate human rights and engage in unethical behavior: greed and the ambition for profit, the feeling of competition in a competitive environment and the attempt to protect and restore violated standards of justice (Fassin, 2005). It is important to protect against human rights violations, honor every human being and protect human right to life (Donnelly, 2013). The formation of the responsibilities regarding the protection of human rights has come a long way. This will be discussed in the next section.
2.1.1. Development of Human Rights Responsibilities
All human rights are enclosed in the UN’s Universal Declaration of Human Rights, which was set up in 1948 to form the basis for all member states to respect for the equal rights and dignity of individuals and communities worldwide (Assembly, 1948). During the time of the UN’s Universal Declaration of Human Rights the state was seen as the only party having the obligations emanating from the Declaration, concerning human rights violations (Waddock & Wettstein, 2005). Corporations were not considered to have any responsibilities for the protection of human rights. The Organisation for Economic Cooperation and Development (OECD) was in 1976 the first to set up a multilateral initiative with guidelines for
Multinational Enterprises (MNEs), called “Ministerial Declaration on International Investment and Multinational Enterprises” (Ruggie & Nelson, 2015, p.1). Although these guidelines did not include specific responsibilities of corporations regarding human rights, it advised corporations to act socially responsible in their operating countries by, for example, protecting the environment and making economic and social contributions (Ruggie & Nelson, 2015). All OECD member states were obligated to encourage adherence to these OECD guidelines, although they were non-binding for corporations. The main responsibility
regarding the protection of human rights was that of states. However, large changes between 1990 and the present resulted in a change of thought about who is responsible for the
protection against human rights violations. The increasing globalization of markets and national economies is the main cause of this change in thought as nation states were no longer able to control for the protection of human rights across state borders (Waddock & Wettstein, 2005).
The proliferating globalization of the economy, which started around the year 1990, increased the amount of corporations going global. Corporations started operating across borders in developed but also less developed countries, like conflict-affected areas, in which governments were unable to protect human rights (Muchlinski, 2012). The impact
corporations had on their environment and stakeholders also expanded globally, which influenced the economic and social power those corporations could gain. This power and influence of MNEs could potentially have a positive effect in the realization of human rights protection as their activities transcended national borders and reached beyond nation state control (Waddock & Wettstein, 2005). However, the goal of these corporations is to make profit and to gain power, which can also be at the expense of moral responsibilities
Through the globalization of the economy, some of the MNEs have grown as large, and have as many resources, as some small or medium sized countries. This increases the need for a systematic, international, universally applicable formation of human rights protection with a responsibility of both the state and corporations (Waddock & Wettstein, 2005). The MNE guidelines that were set up by the OECD in 1976 were revised in 2000 to include the notion to respect all human rights in the operating country in line with the responsibilities regarding the protection of human rights of the government in that country (Ruggie & Nelson, 2015). Some responsibilities were included in more detail in the revised OECD guidelines, like the responsibility to eliminate child labor. Also, the OECD began to encourage MNEs as well as non-member states to comply with the guidelines. Within the years 2000 to 2009 National Contact Points (NCP), initiated by the OECD in 1984, began to play a more important role (Ruggie & Nelson, 2015). An NCP is an office within each
government where complaints regarding the OECD guidelines can be filed and the guidelines are promoted. However, lots of complaints to the NCP could not be accepted because of the so-called investment nexus, in which an MNE often did not have equity and therefore there was no direct investor to file the complaint against (Ruggie & Nelson, 2015).
The discussion around the role of corporations and human rights resurged when Professor John Ruggie proposed the “Protect, Respect and Remedy” Framework in 2008 after he was asked by Kofi Annan, who was UN secretary general at the UN Commission of Human Rights, to “identify and clarify existing standards and best practices” (Ruggie & Nelson, 2015, p.3). After the “Protect, Respect and Remedy” Framework was presented, John Ruggie introduced 31 guiding principles to implement the framework, also called the UN Guiding Principles of Business and Human Rights. The UN Human Rights Council unanimously supported these Guiding Principles in 2011. The UN Guiding Principles of Business and Human Rights define the responsibilities of both corporations and government
regarding the protection of human rights (Ruggie & Nelson, 2015). The OECD Guidelines were revised in 2011 and aligned with these Guiding Principles by adding a full chapter on the responsibility of corporations to respect human rights and requirements for human rights due diligence and responsible supply chain management (OECD, 2011).
The UN Guiding Principles of Business and Human Rights have mainly a normative contribution by setting a global definition of the responsibilities of corporations and
government, for the prevention of human rights violations (Ruggie, 2011). According to John Ruggie, who was former UN Secretary-General’s Special Representative on human rights and transnational corporations, this forms the end of the beginning in where the focus shifts from discussing who is responsible for what action towards improvements in implementation of the UN Guiding Principles instead (Ruggie & Nelson, 2015).
2.1.2. The UN Guiding Principles of Business and Human Rights
The UN Guiding Principles of Business and Human Rights is based on three pillars: the responsibility of the state, corporate responsibility, and access to effective remedies for human rights violations (United Nations, 2011). The first pillar is concerned with the role of the state regarding the prevention of human rights violations. The obligation of the state is to protect, promote and fulfill human rights (Salcito, Wielga, & Singer, 2015). They need to prevent companies but also state-owned corporations from involvement in human rights violations. The second pillar of the framework is concerned with corporations respecting human rights. Corporations need to conduct due diligence and responsible supply chain management in their operations and their service relationships. This means that corporations need to be aware of the impact they have on others and their environment. The responsibility of a corporation in respecting human rights is separate from the role of the state and can be supported with human rights business policies. Also, the responsibility of corporations is to
rights that are directly or indirectly caused by their business operations. The third pillar of the framework is about the effective remedy on harm that is caused. This is the responsibility of both the government and corporations. It is the role of the government to make sure there is a system in place where complaints can be filed and settled when there is a violation in human rights. Examples of these systems initiated by government are: courts, labor tribunals,
ombudsman institutions and OECD contact points. Corporations, as part of their human rights due diligence, also have the responsibility to make sure human rights violations can be filed and can be made right through, for example, appropriate grievance mechanisms. There are guiding principles for what constitutes an effective remedy. These principles state that a remedy has to be legitimate, learning focused, predictable, rights compatible, transparent, accessible and equitable (Danish Institute for Human Rights, 2015). This will be explained in more detail in paragraph 2.2.2. Remedies for Human Rights Violations.
There were, until 2014, no direct international binding standards and principles for conducting ethically responsible business behavior and there was no reward and punishment system for corporations in respecting human rights. The existing guidelines and standards were considered soft law and could only be encouraged and recommended by several parties (Bratspies, 2005). However, large faith is laid on the use of soft law as it conveys
inspirational goals and ambitions regarding CSR in respecting human rights. Also, soft law consists of norms and societal expectations, which creates a form of moral liability that influences corporations. Soft law forms the basis for the development of accountability structures and hard law (Nolan & Taylor, 2009). In 2014, Canada was the first state to release a new CSR strategy in which there are material consequences for corporations when they are not adhering to CSR best practices. They will be withdrawn from government support in foreign countries (Ruggie & Nelson, 2015).
Three approaches can be distinguished in how to deal with ethical and human rights issues (Schroeder, 2002). Firstly, there is the moderate approach, which involves holding people accountable who are to blame when there is already an ethical issue. The second approach is the watchful approach, which includes several measures and procedures to ensure the ethical issue does not escalate any further. Lastly, there is the ambitious approach, which is about the prevention of ethical issues occurring in general by changing people with for example education. The Guiding Principles promote the ambitious approach as the soft law norm.
Several parties encourage the UN Guiding Principles of Business and Human Rights and the involvement of corporations in respecting and promoting human rights (Danish
Institute for Human Rights, 2015). A few examples of these parties that go beyond the Human Rights Council itself are “individual governments, business enterprises and associations, civil society and workers' organisations, national human rights institutions, and investors” (Ruggie, 2011, p.226). Multilateral organizations, use these UN Guidelines to build new initiatives on.
Due to the increasing globalization corporations are under intensifying scrutiny with regard to their impact on the environment and society. Because of this scrutiny of parties that encourage conduct of ethically responsible business and the ability of civil society to file a complaint at an NCP, the response of multiple corporations are formal human rights policies, CSR and Corporate Citizenship (Wettstein, 2012). Corporations have a certain power that can be used to respect and encourage human rights. When corporations are committed to behave in a socially responsible way, addressing human rights and conducting due diligence should be part of their business operations (Arkani & Theobald, 2005). Corporate management is under pressure to engage in ethical behavior and decision-making. To successfully implement CSR practice and prevent human rights violations, an effective socially responsible leadership style and human rights due diligence is needed within corporations (Waldman & Siegel,
2008). The next section will address the concept of human rights due diligence and the effective way to ensure and protect human rights.
2.2. Human Rights Due Diligence and Access to Remedy
In the mid-1990’s several human rights violations committed by large corporations were exposed. Examples are the human rights violations due to conspiracy with repressive governments (Wettstein, 2012), the involvement of Shell in the execution of activist Ken Saro-Wiwa and eight others in Nigeria (Nolan & Taylor, 2009) or the environmental damage of Enron that affected local communities in India (Committee on Government Reform, 2002). These incidences stimulated scrutiny of several parties like Amnesty International and the Human Rights Watch, who brought out reports on the incidents and the human rights violations of these corporations. The increasing attention on the business conduct of
corporations increased the formal implementation of human rights due diligence and human rights policies by corporations (Wettstein, 2012).
As explained before, corporations need to respect human rights in their CSR behavior through three responsibilities (Salcito, Wielga, & Singer, 2015). In short, the basis is that corporations need to state publicly that they are committed to respect human rights. Also, corporations need to conduct human rights due diligence, which will be further discussed in paragraph 2.2.1. Human Rights Due Diligence. Lastly, corporations need to provide access to effective remedies for direct or indirect human rights violations caused by their business operations. This will be discussed in paragraph 2.2.2. Once a human rights violation takes place, the corporation needs to restore and mitigate the violation, which could have an effect on their activities and revenue (Salcito, Wielga, & Singer, 2015). Paragraph 2.2.3. will elaborate on the implementation of human rights due diligence by corporations.
2.2.1. Human Rights Due Diligence
Appropriate human rights due diligence aims not only to protect the corporation from the risks of accusations of mismanagement and violations, but also to guard against risks posed to others affected by the firm’s value chain operations (Muchlinski, 2012). Human rights due diligence is concerned with how corporations should do business and can be defined as “assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed especially to those who are most directly affected” (Ruggie & Nelson, 2015, p.15). A corporation’s human rights due diligence process needs to be transparent and it needs to include both internal and external stakeholders (Nolan & Taylor, 2009). The elements of a suitable due diligence process are incorporated in the UN Guiding Principles of Business and Human Rights and the 2011 OECD Guidelines.
Corporations can establish their human rights due diligence process in a formal human rights policy, appropriate for their size and circumstances. Through human rights due
diligence, corporations can assess the impact of their operations and service relationships on human rights so steps can be taken to mitigate any risks in human rights harm (Ruggie & Nelson, 2015). This means the conduct of human rights due diligence affects the decision-making process of corporations (Salcito, Wielga, & Singer, 2015). The human rights policies of corporations may be dependent on the size of the corporations and the severity of the potential human rights harm. The severity of the potential harm regarding human rights should be reviewed on scale, scope and how irremediable the impact is (Ruggie, 2011). Corporations can encounter serious consequences in the sense of reputational damage, lower goodwill or high mitigating costs, when they do not identify and address human rights concerns appropriately (Muchlinski, 2012).
2.2.2. Remedies for Human Rights Violations
The situation and context a corporation is operating in changes over time, which means that the potential human rights impacts and policies need to be monitored and reviewed regularly. When a corporation is directly or indirectly involved in any sort of human rights violation, it should make effort and be actively engaged in developing and accomplishing an appropriate remedy for the violation (Ruggie, 2011).
According to the UN Guiding Principles of Business and Human Rights a remedy has to comply with eight characteristics to ensure its effectiveness. The first point is that it has to be legitimate, which means the remedy must be trusted by all affected stakeholder groups and the corporations should be held accountable for effective conduct. The second point is that the remedy has to be accessible to all involved stakeholder groups. The third point is that the remedy has to be predictable in the sense that the processes, outcomes and means for
monitoring are clear and known within an appropriate time frame. The fourth point is that the remedy should be equitable, which means that affected stakeholder groups should have access to sources necessary for a remedy process. The fifth term is that the remedy needs to be transparent in a way that sufficient information regarding progress and mechanisms is
provided. The sixth point is that the remedy has to be rights-compatible, which means it needs to comply with internationally recognized human rights. The seventh term is that the remedy should be learning focused to prevent future human rights violations. The last term is that a remedy needs to be based on engagement and dialogue with all involved stakeholder groups during the development and performance of the remedy (United Nations, 2011).
2.2.3. Implementation of Human Rights Due Diligence
John Ruggie set up the UN Guiding Principles in close collaboration with corporations, government and non-governmental organizations. However, the adoption of the UN Guiding Principles of Business and Human Rights by corporations, through the conduct of human
rights due diligence, differs per industry and geographical region. The geographical region that a corporation is domiciled in influences the rate of human rights policy adoption. Asia, the Middle East and North Africa have the lowest rate of adoption of human rights policies. Larger sized corporations and the regions Europe, Australia and Canada have the highest rate of adoption of human rights policies (Salcito, Wielga, & Singer, 2015). When looking at variation between industries, the oil, gas and mining industries has the highest rate of adoption of human rights policies. The apparel industry has the lowest rate of adoption of human rights policies (Salcito, Wielga, & Singer, 2015). These differences in the rate of adoption of the UN Guiding Principles are dependent on the support of the government and the presence of an explicit leadership style (Hamann et al., 2009).
The support of the government is an external factor of importance in how effectively the UN Guiding Principles are adopted by a corporation. The government can encourage the implementation of the UN Guiding principles with national support, guidance and action plans for managing the implementation of policies to prevent and mitigate the impact of corporations on human rights violations. As an internal factor, an explicit leadership commitment is of importance in the carrying out of human rights due diligence processes (Hamann et al., 2009). An ethical leadership style is of importance in the execution of ethically responsible behavior through enacting human rights due diligence by a corporation. This is because the main objective of ethical leadership is to convey ethical standards towards others. This can be accomplished by holding people accountable with punishment and
rewards (Brown & Trevino, 2006).
The Board of Directors is the top of the corporate hierarchy and is responsible for acting in the best interest of the corporation and its shareholders. This creates the expectation and the obligation that members of the Board of Directors will behave in an ethically
regarding ethical behavior and will behave more ethically themselves when people at the top of the firm execute CSR (Schroeder, 2002). In conclusion, the Board of Directors is
responsible for carrying out CSR behavior by conducting an ethical leadership style. The ethical leadership style of the Board of Directors has an influence on others and on the corporate culture. This can create situations in which unethical behavior will be more easily revealed and addressed (Schwartz, Dunfee, & Kline, 2005).
Demonstrating ethically responsible behavior through the conduct of human rights due diligence and by implementing effective remedies for human rights violations may depend on individual characteristics that shape an ethical leadership style within a corporation (Waldman & Siegel, 2008). There are six core ethical values that shape someone with an ethical
leadership style (Schwartz, Dunfee, & Kline, 2005). The first value is honesty, which means that a director has the obligation to prevent any misunderstanding and therefore needs to be truthful and forthright. The second ethical value is integrity, which includes honest behavior in correspondence with the values and principles of the corporation. The third ethical value is loyalty and means a director has to be objective and refrain from acting in self-interest. The fourth value is citizenship, which entails the compliance of law, regulations and standards by having the appropriate mechanisms and actions in place regarding the prevention of unethical behavior. The fifth value is fairness and involves the consideration of the interests of all shareholders and stakeholders. The last ethical value is responsibility, which means a director has to be transparent so accountability can be ensured.
Men and women may have different individual characteristics and may have different degrees of ethical values, which can influence the execution of the ethical leadership style (Ambrose & Schminke, 1999) and thus the demonstration of human rights due diligence and the initiation of remedies for human rights violations. The next section will address the theories regarding gender differences in the performance of ethically responsible behavior.
2.3. Gender Diversity
In 80 out of 108 countries researched, there is a growth in women in management positions in the last 20 years (International Labour Organization, 2015). This means that women will represent a larger portion in the Board of Directors, which can influence the execution of CSR behavior.
In general, two theories can be distinguished on the perception of gender diversity in the Board of Directors. The first theory is the structural (Ameen, Guffey, & McMillan, 1996) or Beta (Ambrose & Schminke, 1999) view, which suggests that there is no difference between men and women in the way they respond to organizational situations and therefore have the same ethical priorities. Studies on this theory found that there is no difference in how men or women value ethical issues (Kidwell, Stevens, & Bethke, 1987; Galbraith &
Stephenson, 1993). The second theory states that women bring different behavior, styles, qualities, ideas and actions into an organization. This is the gender socialization (Ameen, Guffey, & McMillan, 1996) or the Alpha (Ambrose & Schminke, 1999) view. This view suggests that when there are women present in the Board of Directors, there is an
improvement in collaboration, less competition between Board members and therefore improvement in communication. Further, more attention is paid to the concerns of all stakeholders, there is more discussion and easy solutions to difficult questions are avoided. This gender diversity constitutes a change in culture, which has a positive influence on the performance of the Board of Directors (Konrad & Kramer, 2006). However, within this view there is inconsistency in research on whether gender diversity in the Board of Directors has a positive or negative outcome on social organizational performance.
Some studies and organizations believe that gender diversity in the Board of Directors has a positive influence on organizational outcomes (International Labour Organization, 2015) and corporate social performance (Hafsi & Turgut, 2013). However, there are studies
that found that gender diversity in the Board of Directors does not lead to better
organizational performance measured in Tobin’s Q, Return on Assets and Return on Sales (Bøhren & Strøm, 2010). Another example of a negative relation between gender diversity and organizational performance is given by Adams & Ferreira (2009), who argue that women are more often involved in a Board-monitoring role and that when Board-monitoring
increases, the shareholder value of a well-governed organization decreases. Joecks, Pull and Vetter (2013) found a U-shape relation regarding organizational performance and gender diversity in the Board of Directors. This relation states that only after a “critical mass” of 30% women in the Board of Directors, it would be more beneficial than no gender diversity in the Board of Directors. Below this critical mass of 30% it would be more beneficial to have an all male Board of Directors because women would only serve as a token for diversity. Torchia, Calabro, and Huse (2011), for example, argue that whent the critical mass in a Board is reached, organizational innovation will significantly increase. When the critical mass is not reached Torchia, Calabro, and Huse (2011) argue that the minority group will merely serve as tokens. Also, Bear, Rahman and Post (2010) argue for the importance of the critical mass and state that CSR increases when women in the Board are of sufficient size and not a minority group where women merely serve as tokens.
The critical mass theory states that there will be a change in the interaction of a group, depending on its size. In other words, when a critical mass of a minority group is reached, the nature of the interaction within the group changes. In general, when the critical mass of at least three out of ten people of the minority group is reached, a certain change in dynamic and processes takes place within a group. Also, there will be a larger variety in viewpoints
brought into the group (Torchia, Calabro, & Huse, 2011). In a Board of Directors where there are less than 30% female Board members, women are seen as tokens to represent the idea of having women present in the Board of Directors. The tipping point is to have at least three
women, out of ten members, in the Board of Directors. These Boards will have a different culture than a Board of Directors with less than three women. 30% or more women in the Board of Directors will make a contribution because they will have a voice and women will not be isolated or ignored by other Board members (Konrad & Kramer, 2006).
2.3.1. Moral Reasoning
Moral reasoning is one of the drivers behind the importance given to the conduct of human rights due diligence by corporations. The feeling of a moral duty is important when it comes to managing human rights responsibilities by corporations, as respecting human rights through the conduct of human rights due diligence is not legally required. Corporations can judge to a large extent themselves what they consider appropriate ethical behavior and it is therefore dependent on the moral reasoning of corporate leaders. Human rights due diligence conduct by corporations can therefore be either fulfilled as a normative, moral duty of the firm, or as merely an instrumental fulfillment and a strategic consideration (Wettstein, 2012).
When the moral duty to protect human rights is weak and the emphasis is mostly on preventing reputational damage for the corporation, corporations can fall back on their human rights due diligence policy to argue that they are free from blame for not respecting human rights. This would make human rights due diligence a strategic consideration instead of a normative objective to have the moral duty to respect human rights (Fasterling & Demuijnck, 2013). The feeling of moral duty of corporate leaders can differ between men and women (Stedham, Yamamura, & Beekun, 2007). The moral reasoning of men and women regarding ethical judgment can be seen in different point of views.
The difference in the moral reasoning of men and women can be discerned in the gender socialization theory and the structural theory, discussed previously. In the gender socialization view, which argues that men and women bring different qualities and
success and achievements through competition. The moral reasoning of women in this view is driven by their caring for relationships and the emphasis on doing tasks well (Ameen, Guffey, & McMillan, 1996). Furthermore, women are associated with communal personality traits. This involves the benevolent approach towards others with traits of for example kindness, helpfulness, and interpersonal sensitivity (Eagly & Carli, 2007). This creates the differences in gender in moral reasoning regarding human rights due diligence, as men may be more likely to disregard the rules in their competition, in comparison to women who may be more likely to adhere to rules in their emphasis on doing tasks well (Ameen, Guffey, & McMillan, 1996). Men are associated with agentic personality traits, which involve assertiveness and control and include for example traits of individualism, self-confidence, and dominance (Eagly & Carli, 2007).
Considering that men and women may have different individual characteristics and personality traits that can influence the performance of human rights policies and remedies for human rights violations, the gender socialization view states that there is a difference between men and women in their moral reasoning. Several studies found that women, in comparison to men, are more concerned with ethical and social responsibility issues (Betz, O'Connell, & Shepard, 1989; Galbraith & Stephenson, 1993; Bernardi & Threadgill, 2010), perceive a situation often as more unethical (Stedham, Yamamura, & Beekun, 2007) and are more involved with corporate charitable giving (Wang & Coffey, 1992). This leads to women being more sensitive for charitable giving in situations of crisis because this expresses their moral beliefs (Williams, 2003).
In contrast to the gender socialization view, in the structural view, which argues that men and women respond the same in organizational situations, the moral reasoning of men and women is considered to be similar. In this view moral reasoning is created in the early socialization period of people and is overcome because occupational roles outline certain
behavior through rewards. This makes men and women in the same professional position behave in the same ethical way (Ameen, Guffey, & McMillan, 1996).
2.4. Research Question and Hypotheses
In conclusion, there is inconsistent research on the influence of the role of gender diversity in the Board of Directors on ethically responsible behavior. Due to several developments, like the increased globalization, several highly publicized human rights violations by corporations, and the establishment of the UN Guiding Principles of Business and Human Rights,
corporations are under increased pressure to adopt human rights policies and implement formal human rights due diligence processes as well as to have effective remedies in place in case of involvement in human rights violations.
In the representation of CSR through conduct of human rights due diligence to prevent human rights violations, an ethical leadership style is of importance. As explained before, the mixed empirical findings of several studies do not provide support for the gender socialization view over the structural view or the other way around. The demonstration of an ethical
leadership style and thus the execution of human rights policies and remedies for human rights violations may be different between men and women because they have different ethical values and moral reasoning, which would support the gender socialization view. This theory states that men and women bring different characteristics, values, ethical priorities and moral reasoning to the Board of Directors. In addition, the critical mass theory states that only if a critical mass of 30% or more women in the Board is reached, it would be of contribution. On the contrary, the structural view suggests that there are no differences between men and women and therefore there would be no difference in moral reasoning or response to ethical issues.
test the different views of gender diversity in the Board of Directors on human rights
violations. This leads to the following research question that will be answered in this thesis:
What is the influence of gender diversity in the Board of Directors on human rights violations?
To test which of the three theories (critical mass theory, gender socialization theory or structural theory) is more supported with regard to the occurrence of human rights violations, the first hypothesis is split up into three sub-hypotheses.
Hypothesis 1a is concerned with the critical mass theory (Konrad & Kramer, 2006). Due to the fact that there are more women in senior leadership positions there will be
increasing gender diversity in the Board of Directors. It is expected that when a critical mass of 30% or more women in the Board of Directors is reached, less human rights violations will occur. The reason is that only at this tipping point, women will make a significant
contribution to the decisions made in the Board, as they will have sufficient voice and will not be merely seen as tokens for diversity. This leads to the following hypothesis:
Hypothesis 1a: A Board of Directors with 30% or more women has a negative effect on the occurrence of human rights violations, compared to a Board of Directors with less than 30% women.
Hypothesis 1b tests the gender socialization view (Ameen, Guffey, & McMillan, 1996) in which there is a difference between the ethical judgment and ethical priorities of men and women. Considering the difference in moral reasoning of men and women and the
relation with the involvement in CSR by women in the Board of Directors, it is expected that any amount of gender diversity in the Board of Directors will decrease the occurrence of human rights violations. This leads to the following hypothesis:
Hypothesis 1b: Any degree of gender diversity in the Board of Directors has a negative effect on the occurrence of human rights violations.
Hypothesis 1c is concerned with the structural view (Ameen, Guffey, & McMillan, 1996), which states that there are no differences in the ethical judgments between men and women in the Board of Directors. In line with this theory it is expected that there will be no statistical significant differences in the occurrence of human rights violations in a Board of Directors with gender diversity in comparison to a Board of Directors without gender diversity. This leads to the following hypothesis:
Hypothesis 1c: Gender diversity in the Board of Directors has no significantly different effect on the occurrence of human rights violations, compared to a Board of Directors without gender diversity.
To test which of the three theories (critical mass theory, gender socialization theory or structural theory) is more supported with regard to the initiation of a remedy for human rights violations, the second hypothesis is also split up into three sub-hypotheses.
Hypothesis 2a is concerned with the critical mass theory. When taking the critical mass theory into account, in which 30% or more women in the Board of Directors is the tipping point for a more pronounced influence (Torchia, Calabro, & Huse, 2011), it can be expected that a Board of Directors with at least 30% women, has a more distinct positive effect on the initiation of a remedy for human rights violations. The reason for this is that the women in the Board may have more voice in ethical and moral Board decisions. This leads to the following hypothesis:
Hypothesis 2a: A Board of Directors with 30% or more women has a positive effect on the initiation of remedies for human rights violations, compared to a Board of Directors with less than 30% women.
Hypothesis 2b tests the gender socialization theory, which states that women, in
comparison to men, are more likely to adhere to rules and place more emphasis on doing tasks well and the caring and relationship perspective of human rights due diligence (Ameen,
Guffey, & McMillan, 1996). It can be expected that the initiation of a remedy to prevent and counteract against corporate human rights violations can be positively impacted by this difference in men and women. This leads to the following hypothesis:
Hypothesis 2b: Any degree of gender diversity in the Board of Directors has a positive effect on the initiation of a remedy for human rights violations.
Hypothesis 2c is concerned with the structural view. With this theory it can be expected that there will be no statistically significant difference in the initiation of remedies for human rights violations in different Boards. The reason for this is that the structural theory states that there are no differences in gender regarding the response to organizational
situations (Ameen, Guffey, & McMillan, 1996). This leads to the following hypothesis:
Hypothesis 2c: Gender diversity in the Board of Directors has no significantly different effect on the initiation of remedies for human rights violations, compared to a Board of Directors without gender diversity.
The objectives of this study are to examine what the influence is of both men and women, in comparison to solely men, in the Board of Directors on human rights violations. This objective is reached by examining the two hypotheses that are each divided into three sub-hypotheses. The following conceptual framework makes the research question and, the in total, six hypotheses visual, with gender diversity as the independent variable (IV) and the occurrence of human rights violation and the initiation of a remedy as dependent variables (DV): Occurrence of human right violations IV DV Gender diversity in the Board of Directors
Initiation of a remedy for human right
violations (H2a:
+
) (H2b:+
) (H2c: =) (H1a:-
) (H1b:-
) (H1c: =)3. Research Methodology
The research of this thesis consists of a descriptive, theoretical part in the second chapter. This second chapter provides fundamental information on human rights violations, human rights due diligence and theories on gender diversity and CSR. The theoretical part is followed by an empirical part to test the hypotheses. In the empirical research the several variables will be tested with desk research by consulting the Internet and the CHRD database (Saunders, Lewis, Thornhill, Booij, & Verckens, 2011). There is one independent variable and there are two dependent variables, which are mentioned in the previous chapter. The research question can be answered by testing the hypotheses. This chapter will first discuss the overall research design. The second section of this chapter will address the independent variable and the third section will address the research design of the dependent variables. The last section will address the methodology of how the data is analyzed in this research.
3.1. Research Design
The research conducted in this thesis is mainly deductive. This becomes clear as this research starts with a descriptive theoretical framework that leads to testable hypotheses. With the testing of the hypotheses there is the search to explain the relationship between diversity in the Board of Directors, and 1) the likelihood of human rights violations, and 2) whether more remedies will be used to counteract against any corporate human rights violations that do occur. The aim in testing the hypotheses is to find a relationship between variables, this makes it an explanatory research. Statistical techniques are used to analyze the data. By reporting all elements in this research, the research process becomes more transparent. This, together with the structured method for data gathering and analysis makes it easier to replicate the study and ensures reliability. The advantage of using a deductive research method is that because of the structured methodology replication is possible. This creates reliability.
explanations as only the effect of gender diversity is measured and that perceptions and ideas behind certain behavior can be better understood when an inductive approach, like in-depth interviews, is used (Saunders, Lewis, & Thornhill, 2012).
Furthermore, the overall research design is an explanatory mixed method, database study. The main source of data is from the database CHRD. This makes it secondary data analysis, which creates the possibility to give valuable insights in developments. The database contains large amounts of data on firm level and will be consulted to answer the hypotheses. The data in the CHRD database is derived from the BHRRC website and is systematically coded with the online survey tool Qualtrics. For this thesis I was part of the coding team to process the qualitative, narrative-based data into quantitative data. After receiving training on how to correctly search for and code the information on several human rights violations, I contributed to the CHRD database by coding human rights violations in Africa in the mining industry. All team members were trained to use the custom coding instrument, using Qualtrics software, to standardize and quantify the qualitative data into the CHRD database (Olsen, 2014). Because of the training the validity and credibility of the CHRD database is kept as high as possible. This also reduces the measurement bias (Saunders, Lewis, & Thornhill, 2012). Because many trained people contributed to the CHRD database, this gives the advantage of a large amount of database data. Also, it makes generalization more viable because the sample is of sufficient size (Saunders, Lewis, & Thornhill, 2012).
Mixed method research is a combination of quantitative and qualitative methods of research (Saunders, Lewis, & Thornhill, 2012). The mixed method design has several advantages for this thesis, which make it the most proper overall design. This thesis starts with descriptive theory to create testable hypotheses. These hypotheses are tested with quantitative research to find relationships and patterns. With the use of content analysis, written communication can be coded and structured and finally analyzed to test the
hypotheses (Insch, Moore, & Murphy, 1997). Structures, patterns and relationships between variables can be derived from qualitative data from the BHRRC website when this data is quantified by coding it into the CHRD database (CHRD, n.d.). This means there will be a quantification of qualitative data (Bryman, 2006). The CHRD database consists of compiled data as summarizing and quantification of text is done from the BHRRC website (Saunders, Lewis, & Thornhill, 2012).
The core concepts of the hypotheses are operationalized so standardized information can be used to measure facts. The concepts are operationalized with reductionism, which means the concepts are reduced to simpler measurable elements. Also, this creates a better understanding of the problem as a whole (Saunders, Lewis, & Thornhill, 2012). For this research it is needed to define several concepts for the hypotheses to be measured in the dataset in a structured way. The next section operationalizes the concept of gender diversity and gives more detail on the geographic regions and the industries. The concepts of human rights violations and remedies for human rights violations are operationalized in section 3.3 by giving more information on the CHRD database coding processes. The last section addresses the methodology used for analyzing the data in SPSS.
3.2. Independent variable
The independent variable in this research is: gender diversity in the Board of Directors. This variable will be examined with data from financial statements and annual reports of several large MNEs in the textile & apparel and the oil, gas, & coal industries. The data derived from the financial statements and annual reports is documented and edited in a data matrix in Excel so it is easier to transport it in the right format into SPSS. First, this section will provide some detail on the industries and geographic regions after which the operationalization of gender diversity is discussed.
The industries on which this research is focused is the textile & apparel industry and the oil, gas & mining industry. According to John Ruggie (at the time UN Secretary-General’s Special Representative on human rights and transnational corporations) the oil, gas and
mining industry together with the footwear and apparel industry are responsible for the largest amount of human rights violations (Ruggie, 2007). The oil, gas and coal industry is subject to depletion and exploitation of natural resources. Natural resources are increasingly scarcer and the energy demand is extensive, which raises the attempts of MNEs to secure their position and access. This mainly results in environmental and societal harm (Short et al., 2015). The clothing industry is one of the most vulnerable industries for the search for minimization of production costs, the maximization of shareholder value and the exploitation of workers. The textile and apparel industry often outsources their production to developing countries. This can conflict with labor rights and results in human rights violations (Islam & McPhail, 2011). In addition, little recent research is done on human rights violations in the textile and apparel industry. Because the textile & apparel industry and the oil, gas & mining industry have been the most extensive regarding human rights violations, this thesis is focusing on data within these industries.
For this thesis, data is used of companies that are active in more than one country. One reason is that the textile and apparel companies that are active in developed countries often outsource their production to developing countries that are cheaper in production costs. This research is therefore focused on the human rights violations in the countries of the three regions Asia, Africa and South America. These three regions have low manufacturing costs and minimum labor wages of textile and apparel. The production network of clothing has shifted from developed to low wage developing countries, like Vietnam, Bangladesh
Cambodia, and South Africa. This results in developing countries getting more dependent on MNEs, who in turn try to keep the MNEs satisfied by providing cheap labor (Islam &
McPhail, 2011). Also, countries like Venezuela, China and Nigeria are rich in natural resources (Sauter, Stockdale, & Ausick, 2012). Countries high in natural resources often experience poverty and are vulnerable to the global energy demand. Local communities have little voice in the extraction of natural resources executed by powerful MNEs. Consequences of the extraction of natural resources are often pollution, displacement and violence (Oxfam America Inc, 2015).
The population of this research is defined as all MNEs active in the textile & apparel and the oil, gas & coal industry in every country around the world. From this population a quota sample is drawn (Saunders, Lewis, Thornhill, Booij, & Verckens, 2011) based on the 25 largest companies in the textile & apparel industry and the 25 largest companies in the oil, gas & coal industry for which information on the composition of the Board of Directors could be found. The largest MNEs in both industries are selected based on their market
capitalization, which is an indication of a corporation its size and measured by the market value of the outstanding shares of a corporation (Investopedia, 2004). The composition of the Board of Directors of the in total 50 companies is documented from financial statements and annual reports on the years 2009 to 2014 in data set 1. There were two corporations in the textile and apparel industry and one corporation in the oil, gas and coal industry on which no information could be found on the Board of Directors. These corporations were excluded from the list with corporations and replaced by smaller corporations based on market capitalization. This resulted in 25 corporations of both industries. The concept of gender diversity is operationalized by defining the ratio of women to the total amount of individuals in the Board of Directors. This is done by counting the amount of women present in the Board of Directors and the total amount of individuals present in the Board of Directors. The ratio of women compared to men can be derived from this information.
3.3. Dependent variables
The dependent variables of this research are: the occurrence of human rights violations and the initiation of corporate remedies for human rights violations. These variables will be examined with the Corporations & Human Rights Database (CHRD). This database is based on the BHRRC website, which is the most comprehensive database available containing qualitative information on human rights abuses of corporations around the world.
The unit of analysis of the CHRD database is a Corporate Abuse Allegation (CAA). A CAA can be defined as an allegation of a violation of human rights by a specific corporation, coming from an individual, the government or a Non Governmental Organization. The CAAs are registered over the time period 2000 until 2014, which can be used to measure the human rights violations over several years. The data on human rights violations of all of MNEs will be analyzed over the years 2009 until 2014 and complemented with data on the Board of Directors in the years of the occurring violations. For this research the data within the CHRD database is filtered on corporations with human rights violations in the three regions Africa, Asia and South America in the textile & apparel and the oil, gas & coal industries, with violations in the years 2009 until 2014.
In total there are two data sets set up to test the hypotheses. The first data set for the first set of hypotheses related to occurrence of a human rights violations consists of the 50 largest corporations by market capitalization in the textile & apparel and oil, gas & coal industries, combined with data on which the corporations have a human rights violation listed in the CHRD database. This means that some of the 50 companies in the textile & apparel and oil, gas & coal industries also appear in the CHRD data list with companies that have one or more human rights violations. When coding this combined data set, it results in a sample of 50 corporations with and without human rights violations within the years 2009 until 2014. In total, this data set contains information on the composition of the Board of Directors of 300
years (from 2009 until 2014 is six years, multiplied by the 50 corporations, results in 300 years), in which 27 years have a human rights violation. This first data set is used to test the first three sub-hypotheses, as all corporations, with and without human rights violations, are needed to test whether human rights violations occur with a gender diverse Board of
Directors.
The second data set for the second set of hypotheses is derived from the firms listed in the CHRD database, complemented with data from financial statements and Internet searches on the composition of the Board of Directors in the years of the occurring violations. For this period, there are in total 119 companies with 145 human rights violations in the CHRD database. Some companies have little to no information available regarding the Board of Directors, which reduced the sample to 55 companies with in total 75 human rights violations and 81 remedy outcomes, given that some violations receive more than one type of remedy. This second data set is used to test the second three sub-hypotheses as only the corporations with human rights violations are needed to test whether a remedy for the violation was initiated or not.
From both data sets it becomes clear that 73.8% of the Boards have gender diversity, with an average of 13.8% women present in the Board of Directors, having a standard
deviation of 11.7%. The corporate remedies for human rights violations can be measured with the non-judicial remedy section in the CHRD database. Within this remedy section the data on the initiation of corporate remedies for human rights violation can be derived. From all the corporations with a human rights violation (N = 75), 42.7% initiated a remedy. This is 9.2% of the total data, including the corporations without human rights violations. There are different remedy outcomes possible, namely: ‘Apology/apologies, Compensation (financial), Compensation (non financial), Rehabilitation, Restitution, Guarantee of non-repetition, and Other’. (Olsen, 2014, p. 24-25).
3.4. Methodology
The methodology that is used in this research to test the first and second hypothesis and analyze the data consists of a Pearson Chi-square (χ2) test and a logistic regression analysis. These tests are conducted with the statistical computer program IBM SPSS, version 23.
In this research dummy variables can be used for the coding of different compositions of the Board of Directors, indicating the occurrence of a human rights violation and the initiation of a remedy for human rights violations. Dummy variables are useful for the used SPSS analysis (Torchia, Calabro, & Huse, 2011). A dummy variable is set up in the first data set to indicate if a human rights violation occurred or not. A specific year of a specific corporation is coded a “1” if the corporation is accused of a human rights violation and a “0” if not. This is useful for testing the first hypothesis. Another dummy variable is set up in the second data set to indicate if a remedy against the human rights violation is initiated or not. This is useful for testing the second hypothesis. For both data sets the data on the ratio of women to total individuals in the Board of Directors is separated into three groups to account for a possible effect of the critical mass of at least 30% women to have a significant influence in the Board. The first group consists of a Board of Directors without any women, consisting solely of men. This group is coded with a “0” and serves as the baseline needed to compare with the other groups. The second group consists of a Board of Directors with <30% women present in the Board and is coded with a “1”. The third group consists of ≥30% women present in the Board of the Directors. This group is coded with a “2”.
The data used to test the hypotheses in this research consists of independent samples of nominal data. To test hypotheses 1a and 2a on the critical mass theory it is needed to test whether there is a significant difference between the combination of category 0, consisting of a Board of Directors without any women, combined with category 1, consisting of Boards with <30% women, compared to category 2, consisting of ≥30% women present in the Board,
and whether this is significantly related to the occurrence of human rights violations and the initiation of remedies. A Pearson Chi-square is the most appropriate test to find a relation or association.
To test hypotheses 1b and 2b, on the gender socialization theory, it is needed to test whether category 0, consisting of a Board of Directors without any women, is significantly different from category 1, consisting of more than zero but less than 30% women present in the Board, in combination with category 2, consisting of ≥30% women in the Board, and whether this is significantly related to the occurrence of human rights violations and the initiation of remedies. It is possible to test this with a Pearson Chi-square test.
To test hypotheses 1c and 2c it is needed to test the significance of differences between a gender diverse and a not gender diverse Board of Directors on the occurrence of human rights violations and the initiation of remedies. This is possible with equivalence testing methods. The t-test and Anova, for example, can be used to test the dependence or difference between a categorical independent variable and a continuous dependent variable (DeCoster, 2006). Because this research consists of only nominal data available on the dependent variable, tests like the t-test and Anova cannot be used as these tests compare means to test equivalence. Nominal data does not have a mean but has frequencies. Therefore, it is needed to test the significance of differences between frequencies. A Pearson Chi-square test uses frequencies instead of means but can only be used to test the relation between two categorical variables (Kinnear & Gray, 2004).
3.4.1. Pearson Chi-square test
A Pearson Chi-square test can be used to test if there is a relationship or association between two categorical, nominal variables. In this research the relationship between gender diversity in the Board of Directors and human rights violations is tested, using a 2 X 2 table. Also, the
for human rights violations is tested, using a 2 X 2 table. This is only possible when the assumption is met that all observed results per cell have a value of five or higher (UCLA: Statistical Consulting Group, 2015).
The Pearson Chi-square test can be performed by first summarizing the observed results for each category in a 2 X 2 table. From these observed tables the expected counts can be derived, which represents the results when there would be no relationship between the variables. This can be done with the formula: 𝐸 =!"# !"!#$ × !"#$%& !"!#$!"#$%& !"#$ . When both the
observed and expected counts are set up, the Chi-square test can be conducted with the following formula to test if there is a relationship between gender diversity in the Board of Directors and the occurrence of human rights violations and if there is a relationship between gender diversity and the initiation of a remedy (The Pennsylvania State University, 2015): 𝜒! = Σ
!"" !"##$(!"#$%&$'!!"#$%&$')
!
!"#$%&$' .
In addition to the Pearson Chi-square test it is valuable to report the Cramer’s V or Phi. The Cramer’s V expresses the relative strength of an association between pairs of
variables with a value between 0 and 1. A result of 0 indicates no association and a result of 1 indicates a perfect association. Phi expresses the relative strength of an association between two dichotomous variables with a value between -1 and +1. A result of -1 expresses a perfect negative association between the two dichotomous variables. A result of 0 means there is no association and a result of +1 expresses a perfect positive association between two
dichotomous variables (Saunders, Lewis, & Thornhill, 2012).
3.4.2. Logistic Regression Analysis
To research how certain independent variables are related to the dependent variable it is useful to perform a multiple regression analysis. A multiple regression analysis can be used to measure the size of the effects that independent variables have on the dependent variable
(Rubinfeld, 1996). When testing a discrete, binary output variable (a variable coded with “0” and “1”) with input variables that are also coded in different classifications, the multiple logistic regression or the binary logistic regression can be used. The logistic regression analysis is one of the most used measurements for analyzing discrete data (Carnegie Mellon University, 2013). In this thesis the aim of doing a logistic regression analysis is to describe the way in which the occurence of human rights violations varies over Board of Directors with and without gender diversity.
The results of the logistic regression analyses predict the probability of the occurence of human rights violations when there is a one unit change in one of the categories of gender diversity (yes or no) in the Board of Directors when the other category is held constant. This is also the case for the initiation of a remedy for human rights violation when there is a one unit change in one of the categories of gender diversity (yes or no) in the Board of Directors when the other category is held constant.
