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Faculty & Research

Georg Wernicke Awarded for Work on Gender and Ethnicity

Assistant Professor of Strategy and Business Policy at HEC Paris, Georg Wernicke, was conferred the 2022 Best Paper Award from the German Academic Association of Business Research (VHB), for his exploration of the role of gender and ethnicity in the reputational penalties for directors linked to corporate fraud.

 

Georg Wernicke HEC News media

Co-authored with Ivana Naumovska (INSEAD) and Edward J. Zajac (Northwestern University), Georg Wernicke’s research paper is entitled: “Last to Come and Last to Go? The Complex Role of Gender and Ethnicity in the Reputational Penalties for Directors Linked to Corporate Fraud”. It was published in 2020 by the Academy of Management Journal.

The research concludes that, in a context where companies are increasingly facing societal pressure to diversify their boards, these well-intended measures may have unforeseen consequences. Because of a perceived shortage of minority candidates, fraud-tainted minority directors — unlike their non-minority counterparts — enjoy some immunity from negative reputational consequences.

Another conclusion the researchers reach is that, when looking to hire female and ethnic minority board members, firms often operate under the assumption that there are few qualified candidates. Georg Wernicke says, “In our view, this false belief has led to what our study has found to be a reputational immunity for minority board directors associated with financial misconduct. Indeed, because of discrimination, women and ethnic minority candidates might not be found in the usual recruiting grounds among the top management of large firms or their board of directors. Firms must therefore look outside of traditional sources (to nonprofit organizations and educational institutions, for example) for a broader pool of qualified candidates.”

The German Academic Association of Business Research (VHB) is the association of all business professors in Germany, Austria, and the German-speaking part of Switzerland, and all German professors working abroad. Find the description of the Award here (in German only).

The VHB Best Paper award is the most prestigious research prize in business in the three aforementioned geographic areas and chosen among all publications in international journals in the last two years across all fields of business research (e.g., including accounting, auditing, finance, strategy, organizational theory, or operations, etc.) authored by any of the over 2600 members of the VHB.

You can also enjoy a summary of this research on Knowledge@HEC: “Unintended Consequences: When Minority Directors Get a “Pass” in Cases of Fraud”.