Yesterday we posted a blog piece with details of our challenges of four high-profile proponents for ‘more women on boards’, inviting them to supply links to research indicating a causal link between increasing gender diversity on boards and corporate financial improvement, for over a decade the purported ‘business case’ for more gender diversity. After 10 years of running C4MB, I am unaware of any studies that show such a link. The only causal links of which I’m aware are between more gender diversity and financial DECLINE.
I originally presented evidence to a House of Commons inquiry in 2012, and it’s a remarkable thing that in the past 10 years not a single mainstream media outlet in the world has reported the causal links shown by large-scale academic studies in a number of countries.
The reasons for this media silence are many and varied, one of them being that so many business journalists – in common with many other journalists – are themselves progressive propagandists. As if to illustrate the point, a supporter has just emailed me a link to a piece in Forbes, EU Law Set To Increase Gender Diversity On Company Boards. It’s by Petro Gaudiano, describe as a ‘contributor’, with the strapline, ‘I explore the complexities of diversity & inclusion’. Let’s see how well he does that, shall we? From his profile on his Forbes page.
My work is rooted in the belief that Diversity & Inclusion research can be leveraged to make our society more inclusive and equitable. I do this work through a three-pronged approach that combines entrepreneurial, nonprofit and academic activities: Aleria (aleria.tech) is a startup that helps corporations measure inclusion to identify strategies that increase company performance and employee satisfaction. ARC (arc501c3.org) is a nonprofit conducting D&I research on the impact of D&I across many aspects of society. I am also an Adjunct Associate Professor at the New York University Stern School of Business, where I teach about D&I in the context of social entrepreneurship, and organize the annual Diversity & Inclusion Research Conference (DIRC.info). In this blog I explore some of the complexities of understanding and managing DEI and I provide useful information and practical tips to help leaders understand the value of embracing inclusion, equity and diversity in their organizations and in their personal lives.
Please reach out (paolo@aleria.tech) if you want to learn more or to discuss these fascinating topics.
The initial words alone are very telling:
My work is rooted in the belief that…
Belief is an act of faith, here a manifestation of ideology. Experience tells me that Gaudiano won’t be capable of engaging with the evidence that a causal link exists between increasing gender diversity on boards and financial decline, because it would cause him unbearable stress through cognitive dissonance to do so. The first paragraph on the Wikipedia entry on the subject:
In the field of psychology, cognitive dissonance is the perception of contradictory information, and the mental toll of it. Relevant items of information include a person’s actions, feelings, ideas, beliefs, values, and things in the environment. Cognitive dissonance is typically experienced as psychological stress when persons participate in an action that goes against one or more of those things. According to this theory, when two actions or ideas are not psychologically consistent with each other, people do all in their power to change them until they become consistent. The discomfort is triggered by the person’s belief clashing with new information perceived, wherein the individual tries to find a way to resolve the contradiction to reduce their discomfort.
Onto Gaudiano’s Forbes article. An extract:
But does increased representation actually lead to better results? A recent article by Jennifer Merton and Nicole Rabovsky offers a thorough review of some of the conflicting findings that seem to support both those in favor and those against the use of gender quotas. It would be pointless in this blog to try to summarize all the studies or to argue whose data and which methodologies are more convincing, but there seem to be two generally accepted findings…
The second finding is a general consensus that simply increasing the number of women on boards is unlikely to lead to significant performance improvements unless the women are given the opportunity to contribute meaningfully to the board’s decision-making activities. Nuyens believes firmly that “Diverse teams perform better if they have great leadership, because there will be challenges if there is diversity. As a leader you have to listen, really listen, have empathy and then start to see how your team can come to a decision—but only after you have listened and assessed different viewpoints.” In other words, diversity on its own is not enough, what is also necessary is inclusion.
This is priceless. Three immediate thoughts:
- ‘A recent article by Jennifer Merton and Nicole Rabovsky offers a thorough review of some of the conflicting findings that seem to support both those in favor and those against the use of gender quotas. It would be pointless in this blog to try to summarize all the studies or to argue whose data and which methodologies are more convincing…’. This is a cynical attempt to assert some equivalence between the studies. I’ve read so many ridiculously flawed ‘studies’ by feminist ‘academics’ on the women on boards issue, for the sake of my mental health I’m disinclined to read any more. I can say with utter confidence, however, that these women don’t provide evidence of the causal link that has been the purported ‘business case’ for well over 10 years.
- ‘The second finding is a general consensus…’. A ‘general consensus’ among whom, you might well ask? Among feminist ‘academics’, that’s who. Quelle surprise.
- The fact that major increases in gender diversity on boards have taken place with no data supporting the claim of an accompanying improvement in financial performance, means that ideologues such as Gaudiano require a new line of attack. He writes, ‘In other words, diversity on its own is not enough, what is also necessary is inclusion.’ In plain English, the problem has been morphed from there not being ‘enough’ women on boards – something that can no longer be claimed without inciting laughter – into companies not listening enough to their female directors. But the overwhelming majority of new female director appointments have been as non-executives, because only a tiny proportion of the people suitable for executive directorships are women, in large part because of women’s freely-made choices, see Susan Pinker’s The Sexual Paradox: Men, Women and the Real Gender Gap (2009). A non-executive directorship is a cushy number for unremarkable women, often with zero understanding of business. To demand of businesses that they ‘listen’ more to these women is like demanding of shepherds that they ‘listen’ more to their sheep.
I’m about to email Gaudiano, pointing him to this blog piece. I public challenge him to answer the same questions I posed yesterday to the four high-profile proponents of more women on boards:
- Do you have evidence of a causal link between increasing gender diversity on boards and enhanced corporate financial performance? If so, please provide links to it. Evidence from the FTSE100 would be particularly welcome, given the almost seven-fold increase in female representation on FTSE100 boards since 2000.
- Do you accept the findings of the longitudinal studies reporting a causal link between increasing gender diversity on boards and declines in corporate financial performance? If so, do you believe declines in financial performance are a price worth paying for having more women on boards?
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