The House of Commons Department for Business, Innovation, & Skills (DBIS) Committee is holding an inquiry into corporate governance, inevitably including ‘women on boards’, and the written submissions have been published – here. My submission on behalf of Campaign for Merit in Business is here. The paragraph numbering of the original hasn’t survived whatever process it was put through, a more readable version (the original) is here.
Helena Morrissey is the Chairwoman of Newton Investment Management and the Investment Association. She was the key figure in setting up The 30% Club, to which many FTSE chairmen belong, committed to increasing the proportion of women on their companies’ boards.
Ms Morrissey’s written submission is here. An extract:
Composition of Boards
There is plenty of empirical evidence (McKinsey, CSFB, Citibank, SocGen have all published extensive analyses, based on Global, Australian and European companies respectively) pointing to a positive correlation between gender diversity on boards and company performance. It is irrelevant that causality can’t be proved [my emphasis] – arguably the smart companies ‘get it’ around diversity and are therefore likely to be more likely to be forward looking in other areas.
Ms Morrissey is perfectly well aware that a causal link exists between increasing female representation on boards and corporate financial decline, because we sent her the evidence years ago. But even leaving this aside, if there were no evidence of a causal link either way, what precisely would there be for ‘smart companies’ to ‘get’ around diversity?
The businessmen and businesswomen who dance to Helena Morrissey’s tunes are blithering idiots, and should be ashamed of themselves, for driving her anti-meritocratic feminist agenda. The same can be said of the senior people at the CBI and the IOD for their roles in these assaults on the British business sector. The CBI’s written submission to the inquiry is here. Point 25 is a gem, misrepresenting correlation on performance as causation:
There is good evidence indicating that committing to diverse leadership has a beneficial impact on performance across a business. [Ref: McKinsey, Why diversity matters, January 2015.] The CBI’s Time for Action report highlights that firms with the highest levels of gender and ethnic diversity are 15% and 35% more likely to outperform their rivals. [Ref: loom, N., et al. Harvard Business School, Management practices across firms and countries, Harvard Business School, 2011.] Workplaces that are both diverse and inclusive are also associated with higher individual performance because employees are better able to innovate (+83%) and more engaged (+101%). [Ref: CBI/Accenture, Employment Trends Survey, 2013, 2014 and 2015.]