More evidence of the problem with ‘improved’ gender diversity in the boardroom

Readers of this blog will be familiar with the University of Michigan study (the Ken Ahern / Amy Dittmar study) which demonstrated the negative impact of increased female representation on the boards of Norwegian companies after 2004. Supporters of ‘improved’ gender diversity in the boardroom have generally chosen to ignore the report – the only truly independent report on the topic – but a few have come up with some ingenious explanations for the findings. One of their more nuanced argument is that quotas may be undesirable because they force companies to draw upon an insufficient pool of women with the experience and/or expertise to perform well as directors. Those holding this view usually support the idea of the ‘pipeline problem’, i.e. ‘things must be done’ to support and enable more women to reach board positions.

It’s an appealing idea in some ways, but what has been the experience of companies which increase female representation on boards without being driven by quotas, or the threat of quotas? They will presumably have chosen those female executives with more of an eye on merit than they would have if driven by quotas. I’m indebted to a supporter for pointing me to an intriguing paper which sheds light on the impact of voluntary increases in female representation on boards. It’s an 80 page long Deutsche Bundesbank ’discussion paper’ written by two professors – Allen N Berger (University of South Carolina) and Klaus Schaeck (Bangor University) – and a DB employee, Thomas Kick. The paper is titled, ‘Executive board composition and bank risk taking’, and it concerns executive boards of German banks over 1994-2010. The following is a link to the paper:

http://www.bundesbank.de/download/volkswirtschaft/dkp/2012/201203dkp.pdf

The summary (page 4) includes the following:

We obtain the following key results. First, we show that younger executive teams increase risk-taking. Second, board changes that result in a higher proportion of female executives also lead to a more risky conduct of business.

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About Mike Buchanan

I'm a men's human rights advocate, writer, and publisher. My primary focus is leading the political party I launched in 2013, Justice for Men & Boys (and the women who love them). I still work actively on two campaigns I launched in early 2012, Campaign for Merit in Business and the Anti-Feminism League. In 2014 I launched The Alternative Sexism Project, aiming to raise public understanding that the sexism faced by men and boys has far more grievous consequences than the sexism faced by women and girls.
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