On Woman’s Hour yesterday there was a piece about a recent report which showed that in the UK men on average earn twice the amount in bonuses as women.
In the public sector women on average earn more in bonuses than men, so we’re talking about the private sector here. It’s not in the least surprising that men earn higher bonuses. They’re far more likely than women to do the really tough, stressful, results-oriented jobs that lead to substantial bonuses, and if they don’t hit their targets, they’ll probably be fired. As an illustration of the gender divide at work here, virtually all the women being appointed to FTSE100 boards share something in common with virtually all the existing ones – they’re appointed as non-executive directors, a gravy-train for women.
Jenni Murray interviewed two people in the studio, Dr Petra Wilton of the Chartered Management Institute (‘CMI’), and Roger Barker, Director of Corporate Governance at the Institute of Directors. The programme runs from 1:08 – 8:18 on the link below:
During the course of the discussion Dr Wilton stated the following:
There’s a real business case to get more women onto boards… studies by McKinsey etc. show time and time again that diversity does pay, it’s actually providing better returns for shareholders and investors.
I let out a low groan when I heard these lines. Anyone who follows our associated blog Campaign for Merit in Business https://c4mb.wordpress.com knows that reports such as McKinsey’s show a correlation between more women on boards and improved financial performance, but correlation isn’t proof of causation, nor does it even imply causation. Every study and report of which we’re aware, including McKinsey reports, make that critical point – yet it’s never mentioned in the relentless narrative of ‘more women on boards leads to improved returns’.
The only evidence of which we’re aware showing anything approaching a causal link, five longitudinal studies, shows that when female representation on boards increases, corporate financial performance declines. Our briefing paper on the matter:
Today I had an exchange of emails and a 20-minute-long phone discussion with Dr Wilton, and I’ll be emailing her a link to this piece shortly. Our public challenge to her:
Dr Wilton, could you – or any of your colleagues at the CMI – please provide evidence to back the assertion you made on Woman’s Hour yesterday, that (gender) diversity provides better returns for shareholders and investors? Please bear in mind that correlation isn’t evidence of causation. Thank you.
If we receive a response from Dr Wilton we’ll publish it, along with our critique of it.