Our thanks to Ian for this. An extract:
The Investment Association has 250 members which manage £7.7tn in assets. Its boss Chris Cummings said that it is “unacceptable” that one in five of the UK’s biggest companies are falling short on gender diversity.
“Companies must do more than take the tokenistic step of appointing just one woman to their board and consider that job done.
“There is also compelling evidence that boards with greater gender balance outperform their less diverse peers,” he said.
In the final sentence Cummings is, of course, confusing correlation with causation – whether knowingly or unknowingly. Better-performing firms can more easily afford to engage in social engineering exercises such as increasing the proportion of women on their boards. As every follower of this blog, and that of Campaign for Merit in Business knows, the “compelling evidence” is of a causal link between increasing gender diversity on boards, and financial performance decline. The evidence is here. Nobody has challenged the evidence since we published it in 2012, and presented it to House of Commons and House of Lords inquiries the same year.
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Our thanks to James and Ray for this. Extracts:
Sacha Romanovitch, the first UK female chief executive of a major City accountancy firm, will step down from Grant Thornton by the end of this year…
Romanovitch said: “As we enter the next phase of our plans, following discussions with Grant Thornton’s board, we have agreed that the time is right for a new chief executive to take the firm forward. I will be working to support a smooth transition to our next chief executive, focusing on continuing to deliver sustainable value for our clients through our diverse [J4MB emphasis] and talented team.”…
Last month, an unnamed Grant Thornton insider claiming to speak for 15 partners or directors [£] [J4MB: Another odd Grauniad typo] leaked to several news organisations the contents of Romanovitch’s annual performance review and an unsigned complaint saying she had “misdirected” the firm.
The anonymous writer accused Romanovitch of pursuing a “socialist agenda” [J4MB: More accurately, a feminist agenda, presumably, of advancing women over men, regardless of their relative merit] and that the firm had no focus on profitability under her leadership and was “out of control”….
The firm’s web page on Romanovitch is here. An extract:
My real passion is enabling others to meet their potential, which has led me to become a qualified coach; to champion our firm’s ground-breaking apprentice programme; and to challenge the norm on views regarding diversity [J4MB emphasis] – a role I am so passionate about I am the chair of the Patron Group for Access Accountancy.
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A piece by Tabby Kinder in today’s Times. I’ve made a number of comments, and posted to links to materials including William Collins’s celebrated piece on gender bias in prison sentencing – here. I urge you to post some comments if you have an interest in this issue. Thanks.
Britain’s 350 biggest companies are likely to miss a government-backed target that says a third of board positions should be held by women by 2020.
Women represent just 25.5 per cent of directors in FTSE 350 companies, according to the Hampton-Alexander review, which was launched by the government in 2016 to increase gender diversity. To meet the target, 40 per cent of all appointments made in the next two years would need to go to women.
Rachel Reeves, chairwoman of the business, energy and industrial strategy committee, accused British companies of moving at a “snail’s pace” and called on investors to put more pressure on boards to improve diversity.
The Hampton-Alexander review has named and shamed ten companies that have no women on their boards, including Sports Direct International, Stobart Group and Herald Investment Trust.
“The inglorious ten companies who still have all-male boards need to drag themselves out of the dark ages and ensure they bring in a more diverse and valuable perspective to the running of their businesses rather than running a closed club of the old boys’ network,” Ms Reeves said.
Chris Cummings, chief executive of the Investment Association, said companies that did not attempt to increase diversity risked shareholder revolts.
The review published explanations that were given for not appointing women, including “they don’t fit in”, “they don’t want the hassle” and “all the good ones have already gone”. Andrew Griffiths, a business minister, said the findings were “pitiful”.
Women make up 29 per cent of FTSE 100 board positions, up from 12.5 per cent in 2011. They will meet the government’s target if progress over the next two years matches the appointments made in the last three years.
You can subscribe to The Times here.
A piece by Gurpreet Narwan in today’s Times:
Most directors sit on boards with only white members and many believe that their companies will struggle to meet the government’s commitment to ending all-white boards within six years.
Britain’s biggest public companies should have at least one non-white director within three years, according to the Parker Review, a government-backed report, which says that corporate decision-making will improve if boards are more diverse.
To hit this target companies still have “considerable work to do”, research by Ridgeway Partners, an executive headhunter, found. Its survey of FTSE 350 directors found that 64 per cent are on all-white boards and 79 per cent of those say that their company is not on track to recruit a non-white board member by the Parker Review’s deadline, which is 2021 for FTSE 100 companies and 2024 for each FTSE 250 board.
Companies are making progress with increasing the number of women on boards. More than two thirds of FTSE 350 board members said that their employers were on track to meet a government objective for 33 per cent of board members to be women by 2020. Almost three quarters of FTSE 100 board members felt they were on track.
Louise Angel, of Ridgeway Partners, said that achieving greater ethnic diversity among board members was “still a relatively new agenda topic for a lot of companies” but predicted “progress over the next few years, in the same way that we have seen a big improvement in gender diversity since 2011”.
Of those surveyed, half said that they would like more ethnic diversity on boards, while 43 per cent said they would welcome more gender diversity. Only 18 per cent listed boardroom diversity as one of their most important considerations.
The report also found that 26 per cent thought their board’s level of engagement with community stakeholders was “insufficient”. Customer engagement was also described as insufficient by 20 per cent of respondents.
Ms Angel said that community engagement needed improving but that in recent years boardrooms had “consistently adapted and evolved to absorb new responsibilities”.
You can subscribe to The Times here.
We’re delighted to report that Dr Catherine Hakim, a world-renowned British sociologist, will be attending the conference.
She’s best known to followers of this website as the originator of Preference Theory in 2000, when she was a Senior Research Fellow at the LSE. For us, the key statistics she reported in her paper were that four in seven British men are “work-centred”, while just one in seven British women is.
All else being equal, we’d expect the gender balance on (say) FTSE100 boards to be around 80% male, 20% female. But all else is far from equal. Two thirds of private sector employees are men, and men still occupy most of the senior positions in professions which disproportionately lead to board directorships, notably Finance. Adding in these factors, we’d expect women to take up fewer than 5% of FTSE100 directorships. Due to government threats of legislated gender quotas, women now occupy over 25% of those positions, and the figure continues to rise. Tellingly, more than 90% of female FTSE100 board directors are Non-Executive Directors.
In late 2012 my request to give oral evidence on behalf of Campaign for Merit in Business to the House of Commons inquiry “Women in the Workplace” was accepted, and at my request I was accompanied by Dr Catherine Hakim and Steve Moxon. The video (56:49) is here.
The committee utterly refused to engage with the evidence I presented of a causal link between increasing female representation on boards and corporate financial decline. Three months later we launched J4MB.
I was recently interviewed by Karren Brady for her hour-long Channel 5 TV documentary, “Why do men earn more than women?” It was broadcast last night, and judging by the adverts before and during the programme, the target audience was predominantly women.
Karen and I had a filmed discussion of about two hours. Very little of the explanations I presented her with concerning gender pay gaps made it into the final documentary – not William Collins’s analysis, not Dr Catherine Hakim’s Preference Theory, published in 2000 – four out of seven British men are work-centred, but only one out of seven British women is. I presented the evidence of a causal link between increasing gender diversity on corporate boards, and financial decline, she ignored it and instead alluded to a 2016 Credit Suisse report which she believed showed a causal link with improved profitability, but didn’t.
The documentary is here, our discussion is between 26:57 – 30:33.
Followers of this website will need no reminding of the causal link between increasing the proportion of women on corporate boards, and consequent financial DECLINE. The evidence for the link is here. I presented it to House of Commons and House of Lords inquiries in 2012, the video (56:50) of the latter session is here.
Long story short? There is NO business case to appoint more women to corporate boards – and, by extension, to senior positions generally.
In the six years since those inquiries, I have tried but failed to get the mainstream media to report on the story. Attempts to engage with politicians in order to end government threats of legislated gender quotas have proved futile. The threats started with The Davies Report, an outrageous report whose author was a Labour peer. Commissioning that report was one of the first acts of David Cameron after becoming became prime minister. The report’s remit was not whether there should be more women on corporate boards, but rather how the government could use its power to make that a reality.
The threats of legislated gender quotas remain, and has moved on from FTSE100 to FTSE350 companies, the government’s goal being gender parity on FTSE350 boards in the next few years. Directors of major companies, along with the CBI and the Institute of Directors, have shown no interest in the issue. Some years ago a collective madness descended on the business community – gynocentrism.
I don’t often buy The Daily Telegraph, but did so today, and was both surprised and delighted to read a piece by Sophie Jarvis, programmes director at The Entrepreneurs Network thinktank, Women won’t appreciate a patronising BBC quota. It’s a Premium article, and you can read one such article a week if you’re a non-subscriber (registration is free). The key words:
Outside the media, where gender quotas have been tried they have backfired. Norway introduced a 40 per cent quota for female directors in 2003. Later research found that the quota led to the employment of inexperienced women who ended up making bad decisions, leading to lower profitability at the companies themselves. [J4MB emphasis]
Followers of this website will need no reminding that we’ve been explaining since 2012 that strong evidence exists – here – demonstrating a causal link between increasing gender diversity on boards, and corporate financial DECLINE. While proponents of ‘more women on boards’ continue to misrepresent correlation (between increasing gender diversity on boards, and corporate financial improvement) as causation, any 16-year-old studying Mathematics at GCSE level should be aware that correlation isn’t the same as causation, and doesn’t even imply it.
Professor Susan Vinnicombe of Cranfield University has been for many years the world’s leading academic proponent for ‘more women on boards’. In 2012 she admitted to a House of Lords inquiry that she knew of no evidence of a causal link between increasing gender diversity on boards, and improved corporate financial performance – here.
Our thanks to James for alerting us to an article about a Chinese investor based in Beijing, Luo Mingxiong. The start of the piece:
After days in the spotlight for saying female CEOs are bad for business, Luo Mingxiong, a Chinese investor in Beijing, does not regret what he said.
“If I could have had a chance to say it again, I would still list this as my investment principle,” said Luo. He was referring to his statement at a public presentation in Beijing this month that “we usually don’t invest in female chief executive officers”.
Luo, the founder of Beijing venture capital firm Jingbei Investment, sparked a public outcry in China as he listed female CEOs in his 10 no-investment principles, suggesting that in the corporate world, they are as negative an attribute as dishonesty or an inability to learn.
Embedded in the article is a link to an article by a female journalist, Enoch Yiu, and published in 2016 in the South China Morning Post. It’s titled, Female CEOs, board members improve company returns, says Credit Suisse study. She is misrepresenting correlation as causation. The 52-page-long 2016 Credit Suisse study is here. The bottom line? At no point does the report claim a causal link between increased gender diversity on boards, and improved corporate financial performance.
Times caption: The Right Rev Libby Lane, second left, was the first female bishop to be consecrated by the Church of England in 2015; there are now 12 women bishops
At the conference in July, The Rev Jules Gomes’s talk title will be, “Singing in the ruins: How feminists have destroyed the Church of England beyond repair”. Having destroyed the CofE, feminists are now progressing to force major companies to appoint female directors they don’t want, let alone need. A piece by Kaya Burgess, Religious Affairs Correspondent, in yesterday’s Times, emphases ours:
Big companies will be held to ransom over the gender divide in their boardrooms after a powerful group of church investors with £17 billion in assets vowed to vote out directors at firms with too few women at the top.
Pressure on FTSE 350 firms to improve the representation of women in top roles will come from the Church Investors Group (CIG), even though many of its members come from institutions such as the Catholic church, which does not allow women to become priests, let alone bishops or archbishops.
The group, which also counts the Church of England’s investment arm and pensions board, and the Scottish Episcopal and Methodist churches among its members, will also take a hard line on excessive pension deals for chief executives and on climate change, it has warned.
The CIG has said it will vote against the re-election of the nomination committee chairman at any company where less than a third of the board is made up of women. If less than a quarter of the board are women, the group will vote against all directors on the nomination committee.
The Church of England currently has 111 serving bishops, of whom just 12 are women, or less than 11 per cent. The Scottish Episcopal Church has only just appointed the first female bishop in its history.
The group has said it will “encourage other shareholders to hold directors to account and refuse to re-elect directors where the company is out of line with best practice”.
Stephen Beer, chief investment officer at the Central Finance Board of the Methodist Church, said the investment group had “ratcheted up its efforts” on gender diversity and said: “Our new policy will enable us to send a clear signal to companies that we expect them to consider fairness when setting executive pay levels. We encourage the wider investment community to hold directors accountable and ensure more responsible stewardship on this critical subject.”
He added, however, that different Christian denominations take different approaches to gender equality within their own institutions for theological reasons.
The investment group will also hold companies to account over executive pay and action on climate page. Members of the CIG will not support renumeration (sic) reports where chief executives receive “excessive” pensions worth more than 30 per cent of their salary, or where firms fail to reveal the pay ratio between the highest and lowest earners.
Financial and pharmaceutical companies that fail to pay the living wage will also not receive backing from the group, while the investors will also vote against the re-election of board chairmen if the company is making too little progress towards “a low carbon world”.
The Rev Canon Edward Carter, chairman of the CIG, said: “If [directors] are not doing something about fairness and about the risks facing us today, they are part of the problem and risk losing the confidence of the public and ultimately their licence to operate.”
In the comments stream, from Hilary Manser:
Another excellent piece from the august August. Our thanks to AVfM for the image above, taken from the piece. An excerpt:
15 of the 20 men still held their titles after 5 years, compared to just 10 of the 20 women.
8 of the men improved the ranking of their companies, compared to 0 of the women.
Final result: Men at plus 451 were 994 ranks higher than comparable women CEOs, who scored minus 443. This was not just a slaughter of women CEOs, this was Bambi meets Godzilla.
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