The role of women in hospital governance: An empirical analysis on the Italian NHS

Over the last decades, several public reforms have tried to ensure the involvement of women in hospital governance to encourage their career advancement and their representation in top management positions. However, literature suggests that women are still under-represented in global health leadership and highlights a strong gender discrimination in the healthcare sector due to the barriers that limit their career advancement. Indeed, research documents that only 28% of the 194 World Health Organizations employ a woman as top health official. Moreover, a cross-country research by Mckinsey reports that the proportions of female directors appointed to the board and the executive committee of hospitals are on average respectively 12% and 10%. Similarly, in the US a study by the American College of Healthcare Executives shows that women are seldom involved in the top management positions, such as CEO and Chairman, while are more likely appointed to middle management positions. Furthermore, in the UK, the Grant Thornton report 2012 on corporate governance in National Health Service shows that only 1/3 of voting members of Foundation Trusts are women, while only few of the medical directors appointed to the trust boards are women. Although the anecdotal evidence shows that women are still under-represented as leaders, there are many reasons to believe that including women in top management teams may be beneficial for hospital outcomes. Relying on various gender theories, previous corporate governance research has extensively shown that board gender diversity fosters the close monitoring of the strategic decisions, brings to the boardroom critical resources and stimulates the debate among directors enhancing the exchange of ideas. The empirical evidence supports these conclusions by highlighting that gender diversity on the boards of directors positively affects firm performance. However, limited efforts have been made with regard to the performance effects of women involvement in hospital governance. Therefore, this study aims to examine the effects of the appointment of women to «apical roles» of hospitals on the related financial and non-financial outcomes. It also investigates the performance implications of the achievement of a certain «critical mass» of women, as governance literature claims that the presence of a certain number of female directors, rather than a single token, has positive implications for board decision making and overall firm outcomes. We investigate our research questions on a sample of 102 Italian public hospitals, including general, teaching and research hospitals. We collect information on hospital performance and composition of TMT from multiple data sources. We capture hospital performance with reference to both financial and non-financial outcomes. Indeed, much of the criticism of focusing only on the impact of women on financial performance stems from the idea that it may diminish prospects for overall improvement due to the complex and multifaceted purposes of healthcare organizations. Our results show that the involvement of women in hospital governance does not have positive effects on performance unless they reach a critical mass. In particular, we find that the presence of women in the TMT of Italian public hospitals does not affect their financial performance while it has a negative effect on non-financial outcomes. Moreover, the analysis shows that the presence of a «critical mass» of women has a positive effect on the ability of hospitals to provide cares through excellent procedures.