Over the past four years I’ve read many reports purporting to show (or implying) a causal link between increased female representation on boards, and enhanced financial performance. All the widely-cited ones of which I’m aware (McKinsey, Credit Suisse, Reuters Thomson, Catalyst…) have had a line or two in the fine print, explaining that the reported correlation doesn’t indicate causation, and (in the more honest reports) that it can’t be taken to even imply causation.
Following our award of a Gormless Feminist of the Month award to Grant Thornton’s Francesca Lagerberg yesterday, we’ve track down the Grant Thornton report she was citing in her BBC radio interview yesterday – Women in Business: the value of diversity. It starts with these words by Ms Lagerberg:
Renewable energy and board diversity: two very different but topical issues with shared challenges. People generally accept that the world needs to move away from fossil fuels; that we can’t go on as we are; that collectively it’s our duty to make progress and clean up our act.
However, unknowns over performance remain: can we rely on renewables when the sun doesn’t shine or the wind doesn’t blow? Upfront costs are higher, so how long will it take for the savings to feed through? In the same way, we know there is a moral imperative to get more women on the boards of companies [Note – we KNOW there is a moral imperative?] – that the status quo is the product of a bygone era.
But what about financial performance? Do companies with diverse boards really perform better than those run purely by men, which currently dominate the corporate landscape? The answer is yes: they perform better. Materially better.
It is quite the most woeful report on this topic I’ve ever seen from a major organization, and while a causal link is clearly implied throughout the report, the casual reader could be forgiven for failing to notice that no causal link has been demonstrated, and the lack of a causal link has not been indicated. It is a shameless feminist propaganda piece, nothing more. Grant Thornton need to recognize it as such, and fast, before the company becomes a laughing stock.