On 10 September we emailed a letter to Viviane Reding, EC Justice Commissioner, asking for her evidence of the ‘missing link’:

https://c4mb.wordpress.com/2012/09/10/viviane-reding-my-request-for-evidence-of-the-missing-link/

This morning I received the following response from Mrs Reding’s ‘Head of Cabinet’, Martin Selmayr, a man for whom you have to have some sympathy. So, what’s the response that’s taken nearly two months to prepare? It’s the following, I recommend you keep your expectations very low:

121106 response from Viviane Reding’s private office

The following is my response to Mr Selmayr:

121106 letter to Martin Selmayr, Viviane Reding’s Head of Cabinet

We’ll keep you informed of any response we receive.

Regular visitors to this blog will recall we recently gave exposure to an interesting paper from academics at the Norwegian School of Management:

https://c4mb.wordpress.com/2012/09/28/a-fourth-study-shows-that-having-more-women-on-boards-leads-to-a-decline-in-corporate-performance/

We were recently in touch with one of the paper’s co-authors, Professor Oyvind Bohren, and he kindly supplied us with his latest paper, titled, ‘Changing organizational form to avoid regulatory constraints: The effect of mandatory gender balance in the boardroom’. The new paper was co-written with Siv Staubo, a (lady) lecturer in the same business school. Professor Bohren has kindly agreed to our request that we make the paper downloadable on this blog, for which we thank him. The paper’s full Abstract:

Norway is the first and so far only country to mandate a minimum fraction of male and female directors. We find that after the new gender balance law required at least 40% of each gender on corporate boards, half the firms exit to an organizational form that is not exposed to the law. This response suggests the gender balance law is costly, and we find the cost to be firm-specific. Firms exit more often when they are non-listed, successful, small, young, have powerful owners, and few female directors. The decision to enter is driven by similar firm characteristics, which reflect high costs of increased gender diversity and low value loss of abandoning the current organizational form. Mandatory gender balance tends to make complying firms end up with the right organizational form, but the wrong board. Conversely, firms exiting or not entering to avoid the new regulation may get the right board, but the wrong organizational form.

The full paper [revised draft received 16.11.12]:

121116 Bohren and Staubo paper (latest draft)

Our Research Director, Michael Klein, has reviewed the paper in detail, and he makes the following comments:

Bohren’s and Staubo’s paper is both interesting and methodologically robust. The paper firstly corrects a common misunderstanding. The Norwegian gender quota legislation is in force for limited liability firms, both those firms which are listed and – this is not widely understood – those which are not listed. Bohren and Staubo not only show that 51% of companies exposed to the quota regulation switched to another organizational form to avoided being covered by the law, but these firms varied systematically from firms that didn’t switch. Most firms seem to balance the costs of complying with quota legislation against the costs of switching organizational form, so the fact that 51% of firms decided to switch organizational form is a remarkable result.

I invariably find articles published by the IEA interesting. Today’s article is an excellent example, written by Kristian Niemietz, Poverty Research Fellow at the IEA:

http://www.iea.org.uk/blog/the-living-wage-and-the-traps-of-motivated-reasoning

It covers the intriguing phenomenon of ‘motivated reasoning’, and gives a prime example in relation to boardroom quotas for women.

In an earlier post we provided a link to the written submissions provided to the House of Commons inquiry into ‘Women in the Workplace’. Three submissions could be considered as being complementary, in that they challenge the policy direction of the current and previous administrations: ours, Steve Moxon’s and Swayne O’Pie’s.

I’ve been invited to give oral evidence to the inquiry’s select committee, as one of a panel of between three and five people, at 11.00 on 20 November. Two other people have already confirmed their willingness  to be on the panel. The first is the renowned sociologist Catherine Hakim, well-known as the creator of Preference Theory (2000), which in our view explains most of the gender ‘imbalance’ we see in the higher reaches of businesses. An earlier post on the matter:

https://c4mb.wordpress.com/2012/07/19/dr-catherine-hakims-preference-theory/

The second person is Steve Moxon, a researcher, writer and campaigner. The Woman Racket (2008) is a ‘must read’ for anyone wishing to understanding how (and why) the genders relate to, and operate in, the workplace. The book covers numerous other gender-related matters in addition. If you read the book, the realities of intra- and inter-gender interactions will make more sense. And you’ll understand why efforts to achieve equality of gender outcomes in the senior reaches of major organisations make efforts to push water uphill with a stick seem sensible by comparison.

The meeting will be open to the public, and I hope to meet some of you there. The event will be televised, and we’ll provide a link to the video in due course. A good day for the campaign.

[30.10.12 update: we’ve now had the opportunity to review the government’s own material at the start of the ‘written submissions’ document, and comment on it towards the end of this post].

Some time ago a new House of Commons inquiry was announced, to investigate the thorny question of ‘Women in the Workplace’:

http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/inquiries/women-in-the-workplace/

A deadline for written submissions was announced, in October, and C4MB sent a written submission before the deadline, as did also Swayne O’Pie (Why Britain Hates Men: Exposing Feminism)  and Steve Moxon (The Woman Racket). We were somewhat surprised to learn later of an extension of the deadline:

Given the level of interest in this inquiry, the Business, Innovation and Skills Committee has decided to extend the deadline for written submissions until Christmas 2012.

Curious. Even more curious is that we’ve today received an email showing that all the written submissions received to date have been published online. A PDF is downloadable from the following:

http://www.publications.parliament.uk/pa/cm201213/cmselect/cmbis/writev/womeninworkplace/contents.htm

So far as we can tell from a quick glance, however, our submitted materials have been included in full, for which we’re grateful. Only three submissions (ours, Steve Moxon’s and Swayne O’Pie’s) diverge from the narrative we can summarise as ‘improved gender diversity is a good thing and will revolutionise the economy and make organisations more successful and women happier’ which we know to be so deeply flawed. I refer you to the following sections:

pp 3 – 15: the government’s own responses.

The ‘questions’ the committee is seeking to answer are themselves ideologically-inspired, as we pointed out in our submission. The government’s ideological position is clear from its response. Cranfield Schoold of Management is referred to as if it were not the very definition of an ideologically-driven organisation financed by long-suffering taxpayers, while on page 14 we find the following gem:

In his report (“Women on Boards”, February 2011) Lord Davies summarised the growing body of evidence on the business benefits of increasing the number of women on corporate boards. Research has shown that strong stock market growth among European companies is most likely to occur where there is a higher proportion of women in senior management teams. Companies with more women on their boards were found to outperform their rivals with a 42% higher return in sales, 66% higher return on invested capital and 53% higher return on equity.

You couldn’t make it up… the government is resorting to repeating claims made by an ideologically-driven peer citing an organisation (Catalyst) which itself no longer makes those claims. How low can this government get?

Pages 16-23: the 30% club, STILL quoting Catalyst, Credit Suisse etc…. but at least a recognition that the Ahern/Dittmar study showed the negative impact of legislated quotas on Norwegian companies. Now for the $64,000 question – why would we expect the threat of quotas to have a different impact from legislated quotas? Both drive inexperienced women onto boards.

pp 37-68: our submission

pp 131-9: Steve Moxon

pp 149-86: Swayne O’Pie

My attention was drawn today to a statement made to a Scottish newspaper, the Herald, by Professor Rita Marcella, Dean of Faculty, Aberdeen Business School. We’ve just emailed her with the following, which should be self-explanatory:

Professor Marcella, good afternoon. I see from the following link that you’ve been reported as supporting legislated quotas for women on boards:

http://www.heraldscotland.com/mobile/business/company-news/doing-it-for-themselves-top-scots-women-say-no-to-quotas-on-boards.19260560?_=20f504618a47d8bb720e22348ea07d6e85f7a7a8

Can you possibly be unaware, as the Dean of Faculty of a Business School, of the evidence showing that driving up the number of women on boards leads to a decline in corporate performance? At least three robust studies show the negative impact of legislated quotas on Norwegian publicly-listed companies – the most well-known being Ahern/Dittmar (2011). If you are aware of these studies, do you believe a decline in corporate performance is a price worth paying to get more women on boards?

If you believe there are studies showing that ‘improving’ gender diversity on boards causes corporate performance to improve, would you be so good as to cite one robust study, without (mis)representing correlation as causation? Thank you. The list of organisations and individuals who have been unable to cite even one such study is a lengthy one, and grows by the week.

I shall be happy to publish your response on our blog, where the content of this email will shortly be posted.

My thanks to Wilhelmina for alerting me to a discussion held on this morning’s BBC television programme Daily Politics (Europe). Among the most ideologically-driven proponents of ‘improved’ gender diversity in boardrooms are female Liberal Democrat politicians. One thinks inevitably of Lynne Featherstone MP and Jo Swinson MP. So we shouldn’t be too surprised that a Lib Dem MEP, Fiona Hall, is one of many MEPs who opposed the appointment of the Governor of the Central Bank of Luxembourg, Yves Mersch, to the executive board of the European Central Bank.

In the TV programme Andrew Neil quizzed both Paul Nuttall – an admirable UKIP MEP, and chairman of the party – and Fiona Hall. Wilhelmina emailed me the following:

Paul Nuttall said that any appointment should be made on merit and merit alone, whatever the gender of the candidate, and that clearly the best person was initially given the job, only for it to be taken from him by the diversity tsars in Brussels. Ms Hall, however, said that there was plenty of evidence along with a ‘recent survey’ that showed that companies’ /organisations’ performance improves with more women on boards, therefore the decision of the ECB to find a woman, and reject the man, was absolutely the right thing to do.

I congratulate Paul Nuttall for his clear support of meritocracy, something that’s been a feature of some of his speeches in Brussels. UKIP is notable among British political parties for its clear support of meritocracy, reflected elsewhere in its support for the return of grammar schools, once a great engine of social mobility. By comparison the Conservative party leadership is ambivalent about meritocracy, always happy to sacrifice it if for possible electoral advantage. What a change from the party when the estimable Mrs Thatcher led it.

Ms Hall is, of course, utterly wrong about ‘plenty of evidence’ supporting her position. There is no such evidence. Her ‘recent survey’ claim is a long-discredited tactic used by proponents of ‘improved’ gender diversity in boardrooms. The ‘survey’ either never materialises, mysteriously, or it’s hopelessly flawed and/or misrepresented (e.g. Catalyst, McKinsey, Credit Suisse…). And so it is that we’ve just emailed Fiona Hall fiona@fionahallmep.co.uk the following public challenge:

Ms Hall, good morning. I noted your claim on today’s Daily Politics (Europe) that a ‘recent survey’ gives support to the idea that increasing the proportion of women on boards leads to improved performance. Would you please be so good as to provide us with details of that survey? The overwhelming evidence of which we’re aware – as outlined on our website – is that increasing the proportion of women on boards leads to a decline in performance. Thank you.

Wilhelmina also queried why the normally robust interviewer Andrew Neil allowed Ms Hall to get away with speaking ‘uncorroborated tosh’. A very good question. I can’t recall a male British television or radio interviewer ever challenging the uncorroborated tosh uttered by any women – or men for that matter – in this area. I’d personally like to see Andrew Neil or Jeremy Paxman grill Sir Roger Carr, chairman of Centrica and President of the CBI, as to why he supports this initiative whilst not claiming it leads to enhanced financial performance. Indeed, I’d like to see Centrica’s major shareholders grill him on the same question.

My thanks to Doris for pointing me to a Mail Online story about the decision of Cynthia Carroll, CEO of FTSE100 company Anglo-American, to resign. The share price rose by 76p on announcement of the news.

http://www.dailymail.co.uk/money/markets/article-2223738/FTSE-loses-feminine-touch-Anglo-American-boss-Cynthia-Carroll-latest-quit.html

During Ms Carroll’s five-year tenure around £9 billion was wiped off the company’s market value.

£9,000,000,000

Headhunters are seeking a replacement CEO. Will Anglo American dare replace Ms Carroll with another female CEO?

Earlier this week I was notified of the publication of the minutes of the 15 October meeting of the House of Lords committee investigating ‘Women on Boards’ (see earlier post). The whole session consisted of a discussion with the Lib Dem MP Jo Swinson, which soon developed into the sort of well-rehearsed but mind-numbingly flawed left-wing propaganda exercise we’ve come to expect.

It then occurred to me that we have yet to see the minutes of an earlier meeting of the committee, held on 23 July, when the peers quizzed Helena Morrissey. I emailed the clerk of the committee, pointing out the non-appearance of the minutes. The minutes were published earlier today:

120723 Helena Morrissey’s testimony to the House of Lords inquiry ‘Women on Boards’

Regular visitors to this blog know we’ve driven many coaches and herds of horses through Mrs Morrissey’s arguments in the past, and most of her testimony on 23 July consisted of variants of those arguments, so I won’t waste your time (or mine) by repeating our counter-arguments. I’ll limit myself to two things on this post. Firstly, to express my surprise that Mrs Morrissey seemed unaware that Catalyst had ceased claiming positive links between more women on boards and enhanced corporate performance, a revelation made by Susan Vinnicombe (Cranfield) in an earlier committee hearing. You’d have thought someone might have informed Mrs M of the about-turn made by Catalyst, wouldn’t you? In Mrs M’s defence, she’s a rather busy businesswoman, campaigner, and mother of nine children. She can’t be expected to keep every plate spinning all the time.

For me, an intriguing issue was raised towards the end of the session:

Baroness Valentine: While the number of non-executive directorships held by women increases, we have heard that the number of female executives remains ‘stubbornly low’. If this stubbornness persists, how can this be addressed? Could quotas or other concerted EU action serve as a driver to tackle this entrenched problem?

Helena Morrissey: Blah, blah, blah… [the early part of Mrs M’s response has been summarised by C4MB, as an act of charity]. I went to Stockholm in February with the Prime Minister to the Northern Future Forum, where it was very interesting to hear from the Scandinavian and Baltic leaders about their experiences. Even in those countries where family situations are shared – childcare, for example, is quite different from in this country – they were still stuck at, at best, 30% women in senior roles. So there is something beyond. I do not think that anyone has quite put their finger on what it is.

Au contraire, Mrs M, someone decidedly has ‘put their finger on what it is’, and some years ago, too. Catherine Hakim, the renowned sociologist, did so with the publication of her Preference Theory (2000). (See earlier posts). Her research led her to conclude that only one in seven women is ‘work-centred’. Now surely we’d expect this work orientation to be critical for anyone seeking to become an executive director of a major business? Mrs M herself is an outstanding example of the type, ironically. She seems curiously blind as to how unusual she is for someone of the female persuasion.

Catherine Hakim also found that four in seven men are ‘work-centred’. These findings alone would lead us to expect a gender balance on boards of 80% men / 20% women, even before we consider other factors tilting the ‘imbalance’ yet further, such as gender-typical choices of functional disciples, and men considerably outnumbering women in the business sector. We’re led, logically, to an inescapable conclusion:

Women are over-represented on major corporate boards.

With two of the four female CEOs in the FTSE100 (Pearson, Anglo American) expected to be replaced by men, we shall have small triumphs of merit over social engineering. Can you imagine the effort and expense that must have gone into finding replacement female CEOs for these two companies?

Have a good weekend.