It’s perhaps a good time to consider the range of arguments currently being expounded for ‘improving’ gender diversity in the boardroom (‘GDITB’), because individuals and organisations are increasingly to be found in one of four distinct camps:
1. GDITB WILL LEAD TO ENHANCED CORPORATE PERFORMANCE
This was the standard argument used by leading proponents of GDITB when this campaign was launched in April 2012. It was designed to silence critics who see GDITB as nothing more than a left-wing social engineering exercise, an exercise being vigorously pursued by our Conservative-led coalition. Leading people in this camp include EC Commissioner Viviane Reding. We know she still maintains this position in her public utterances, and we recently posted some evidence of that:
However, when challenged by us to provide evidence of a positive link with enhanced corporate performance, Mrs Reding admitted (having taken nearly two months to consider the matter) that no such evidence exists:
Perhaps it’s partly in response to our campaigning, but no leading proponents of GDITB (in the United Kingdom at least) – to the best of my knowledge – still argue for the existence of a positive link. At the same time, they refuse to challenge the findings of the five studies we cite showing strong evidence of a negative link.
We’re aware of a number of researchers, almost all of them of the female persuasion, who continue to seek evidence of a positive link, despite the failure of hundreds (or possibly thousands?) of researchers to find it in the past. As I’ve pointed out to a number of these researchers, they’re more likely to find evidence of the Easter Bunny, an observation they don’t always welcome. In psychological terms, they’re clearly experiencing ‘cognitive dissonance’. They must resolve the dissonance between what they believe – that GDITB leads to enhanced corporate performance – and the evidence which overwhelmingly suggests they’re wrong. Rather than accepting reality and dealing with it, they engage in a perpetual hunt for something that doesn’t exist. Which is no way to spend a life, especially when financed by long-suffering taxpayers, as such researchers invariably are.
2. MIS-REPRESENTING CORRELATION AS CAUSATION
This is a favourite tactic of pro-GDITB politicians, most notably Vince Cable, Business Secretary. He continues to cite (in speeches, newspaper articles and official reports) data from Catalyst, an American campaigning organisation, suggesting very strong positive economic impacts (e.g. 66% higher return on capital) from having more women on boards. We wrote to him on the matter:
We know that Catalyst themselves stopped making claims of positive links in September 2011, but I can find nothing on their website http://catalyst.org admitting to that fact. Indeed, you can still download numerous reports from the website claiming positive links, including the 2007 report from their ‘Bottom Line’ series (2004-8) which was the basis of Vince Cable’s claims:
You could be forgiven for missing one of the notes in small print at the bottom of the page:
Correlation does not prove or imply causation.
Numerous individuals in this camp, whilst not personally claiming a causal link, are happy to cite reports and studies which appear to give evidence of a link, even though a reading of the reports themselves (Catalyst, McKinsey, Credit Suisse…) invariably make it clear that correlation doesn’t prove or imply causation. A prominent example is Helena Morrissey, doyenne of the GDITB movement in the UK. She founded the 30% club. On the club’s website we find the following gems http://www.30percentclub.org.uk/research/ :
UK board diversity at a glance
- At the end of 2010, the percentage of women on FTSE 100 boards stood at 12.5%. Women held 5.5% of executive directorships and 15.6% of non-executive directorships.*
- Companies with three or more women board directors achieve return on equity 45% higher than the average company.**
- More gender-diverse companies (defined as the top quartile companies in terms of proportion of women on their executive committees) exceed operating results (EBIT) delivered by those companies with no women on their senior management teams by an average 56%.***
- In the UK, women are expected to own 60% of all personal wealth by 2025.
- There are more female millionaires than male in the age range 18-44.
- Women represent 60% of university graduates in Europe and the US.
* 2010 Female FTSE Report, Cranfield School of Management
** The Bottom Line: Corporate Performance and Women’s Representation on Boards, Catalyst
*** Women Matter: Gender Diversity, a Corporate Performance Driver, McKinsey & Company
The point about female millionaires is an intriguing one. Assuming it’s correct – and I have no reason to doubt otherwise – what might be the motivation for including it? My hunch is it’s meant to imply women are outnumbering men as successful entrepreneurs, but we know that man are far more likely to be entrepreneurs than women, the gender imbalance increasing markedly as you move from smaller to larger companies still run by the original founder. So what might explain the inclusion of the female millionaire point? I assume the gender differential is attributable to divorce settlements enjoyed by women in this age bracket. How is this a valid argument in support of putting more women on boards?
And what has women’s personal wealth got to do with the matter, either? Most of the differential will be attributable again to divorce settlements, not money earned through work. As for the female graduates point – why should there be any link between the gender balance of graduates, and board composition? Might post-university gender-typical work/life decisions have a great deal more influence on board gender composition? Of course they will. We only need to have a basic understanding of Catherine Hakim’s Preference Theory, or Steve Moxon’s material on inter-sex competition outlined in The Woman Racket, to understand why company boards are male-dominated.
3. GDITB IS WORTH PURSUING EVEN IF IT DOESN’T LEAD TO IMPROVED PERFORMANCE AT THE INDIVIDUAL FIRM LEVEL
More individuals and organisations are to be found in this camp over time. It’s the one increasingly favoured by pro-GDITB academics with some integrity. Professor Susan Vinnicombe (Cranfield) is a prominent example, arguing for example that having few women at senior levels in organisations reflects a poor use of the money invested in women’s educations. I met the good professor at a fringe meeting in Birmingham recently, and remarked that I thought Catherine Hakim’s Preference Theory alone explained most of the gender ‘imbalance’ we find at the top of major organisations. She didn’t look very happy after I’d made that remark, it has to be said.
4. IT’S ALL ABOUT FAIRNESS AND EQUALITY
When proponents of GDITB employ this argument you know they’ve run out of ammunition. It’s routinely employed by people – men as well as women, sadly – who see inequalities of outcome as reflecting discriminations. The ‘old boys’ network’ creating the ‘glass ceiling’, and similar claptrap. I’ve never met or communicated with a single person who has personal experience of such phenomena. But their faith in them is absolute and unshakeable. You would as usefully seek an intelligent discussion on the matter with a goldfish.
IS THERE AN ARGUMENT – WITH INTEGRITY – FOR GDITB?
Given the evidence about the impact of GDITB on corporate performance, there remains one possible argument for GDITB which I would respect. I wouldn’t agree with it, on numerous grounds, but I would respect it as a position with some integrity. It’s this:
I accept the empirical evidence which shows that GDITB leads to declines in corporate performance, but I think that’s a price worth paying in the interests of (blah, blah, blah…)
I’m not aware of even one person anywhere in the world arguing along these lines. The myth that equal numbers of women are at least as good as men in all fields (other than in physical competition terms) but superior to men in a number of fields, must be maintained at all costs, whatever the negative impacts of the myth.