The following letter was sent on 14 February 2012 to John Cridland, Director General of the CBI, and an associated press release sent  to all major British newspapers and current affairs periodicals:

14 February 2012

Dear Mr Cridland,

A challenge relating to the CBI’s ‘gender balance in the boardroom’ policy

A cornerstone of capitalism is the freedom of companies to appoint their directors on the basis of merit, experience and expertise. It is therefore regrettable that the CBI sees fit to influence the freedom of companies in this area for the sake of ‘improving’ the gender balance of UK corporate boards. The arguments for doing so rest upon nothing more than radical feminist fantasies, lies, delusions and myths, and the move risks damaging the only wealth-generating sector in the economy.

I recently had exchanges with a senior colleague and yourself about your December 2010 report, ‘Room at the top: improving gender diversity on UK corporate boards’. 14 individuals are credited with ‘supporting’ the report; nine are women, and all five of the men are on record as supporting ‘improved’ gender balance on boards. Your colleague informs me, ‘Like all our policies, it was prepared in full consultation with our members, and the report enjoyed broad support from the other CBI committees when they were consulted. You will understand that the CBI’s governance is a matter for its members, and I will not comment further on this’. The report’s assertions and conclusions were predictable.

It’s my firm belief that – despite protestations to the contrary – the CBI isn’t reflecting the views of many (possibly most) of its members in pressing for more gender balance in the boardroom, and is reinforcing this government’s inclination to compel companies to introduce gender quotas in the event that they don’t increase gender balance ‘voluntarily’. I challenge the CBI to work with me on appointing a reputable polling organisation to gather responses to the following questions from a representative cross-section of CBI member companies, and to agree in advance to making the results publicly available:

Do you agree with the CBI’s conclusion that corporate performance would improve as a result of an increase in the gender balance of company boards?

Do you agree that companies should be compelled through legislation to increase the proportion of women on their boards, in the event that they fail to do so ‘voluntarily’?

Yours sincerely,

Mike Buchanan

Catalyst designed the Bottom Line report series to establish whether an empirical link exists between gender diversity in corporate leadership and financial performance. These studies have examined historical data and revealed statistically significant correlations. The studies do not, however, establish or imply causal connections.

John Van Reenen is a Professor in the Department of Economics, and Director of the Centre for Economic Performance, at the London School of Economics. He also serves on the Editorial Board of the Journal of Industrial Economics. It would be hard to imagine anyone more professionally qualified to comment on the causal link (if any) between increased female representation in the boardroom and enhanced corporate performance – a link which is confidently and frequently asserted by the prime minister, a number of cabinet ministers and junior ministers, the CBI and others, to justify ‘improved’ gender balance in the boardroom.

On 16 February 2012 I emailed Professor Van Reenen the press release relating to the open letter I recently sent to the Director General of the CBI, John Cridland, concerning the CBI’s position in this area (see earlier post). I asked Professor Van Reenen whether the LSE (or specifically the Centre for Economic Performance) had any evidence of a causal link between increasing the proportion of women in the boardroom, and enhanced corporate performance: and if he did, could he kindly share it with me, because I’ve been seeking such evidence for years without finding any. Professor Van Reenen this evening emailed me the following:

‘I personally don’t know of any such evidence, and I am sceptical that there would be a positive causal effect’.

As they say in France, ‘Je reste ma valise’.

So now we know about David Cameron’s current involvement in the ‘women in the boardroom’ campaign (below). Nobody who has any grasp of the extent of his pro-feminist leanings – a matter I covered in David and Goliatha: David Cameron – heir to Harman? (2010) – will be remotely surprised.

Helena Morrissey is one of the high-profile people, mainly women – aided and abetted by a dismal band of supine senior businessmen, politicians, and the CBI,  who should know better – pushing for ‘more women in the boardroom’. She’ll be a key speaker in next Wednesday’s Financial Times seminar ‘Women on Boards’ (the subject of an earlier post). The following article in the Independent of 2 March 2012 was attributed to her:

http://www.independent.co.uk/opinion/commentators/article7468794.ece

In her article Ms Morrissey stated, apparently without irony, ‘… in my view, quotas are not only needless but potentially damaging’. She conveniently omits to mention that the prime reason companies are falling over themselves to ‘improve’ female representation in the boardroom is that the government (and David Cameron in particular) have consistently threatened to impose quotas for women if companies don’t ‘voluntarily’ appoint more female directors. As I’ve pointed out before, there’s an Orwellian slant to the word ‘voluntarily’ in this context: ‘Do this voluntarily, chaps, or we’ll force you to, yah?’

All this follows the woeful Davies Report of February 2011. Let’s remind ourselves that Cameron appointed Lord Davies of Abersoch (a Labour peer) to report into the ‘problem’ of women in the boardroom. You couldn’t make it up, could you? The content of the Davies report is so left-wing and pro-feminist as to almost defy belief. For a copy of the report, click on:

http://www.bis.gov.uk/assets/biscore/business-law/docs/w/11-745-women-on-boards.pdf

It would appear from Helena Morrissey’s article that there’s a declining prospect of quotas. While this is welcome, it doesn’t take a genius to see what’s going on here. Why threaten senior businessmen with quotas, when they’ve already surrendered to the militant feminists’ demands? No need to kick them when they’re already down, they might just start to fight back. (You can but hope).

From Ms Morrissey’s article:

‘Even if these voluntary steps are starting to work, should the government do more to speed up change? The Prime Minister is already doing a lot behind the scenes [Editor’s note: the highlighting of this astonishing sentence is mine].  As well as high-profile events like the reception he hosted at No.10 last October for women in business, David Cameron and his team have been working on several ideas to support business-led initiatives. For many months, they’ve been working with the 30% Club to broaden mentoring programmes and help create a database of ‘board-ready’ women [Editor’s note: again, the highlighting is mine].’

This is nothing less than a conspiracy against men in general and the business sector in particular, the only wealth-generating sector in the country, led by David Cameron. All in the name of a social engineering experiment which can only damage UK plc, maybe irreparably. Nice one, Dave.

I invite the shareholders and directors of British businesses to stiffen the sinews, summon up the blood, and refuse to go along with this diabolical initiative any longer.

My warm thanks to all of you who volunteered to join me in handing out leaflets on 7 March 2012 to people attending the FT seminar ‘Women on Board’.

The grave threat to British business comes not only from within the UK – led by David Cameron and the CBI, to their eternal shame – but, as we might reliably expect, from Europe. There’s a consultation exercise on gender ‘imbalance’ in the boardroom and the woman running it must know that hundreds (maybe even thousands?) of women will contribute to the exercise for every man who does so. You can be sure the Fawcett Society is mobilising its army of feministas. Let’s surprise the woman behind the exercise, then, by contributing our points of view, which may be emailed.

A sample question from the exercise:

In your view, would an increased presence of women on company boards bring economic benefits, and which ones?

It’s apparently not even considered that an increased presence of women might bring economic disbenefits, at least at the current time when there are so few women well qualified for board positions – especially executive director positions, rather than non-executive director positions – as we’d expect from the results of the University of Michigan study on Norwegian boards (see earlier post).

Further details on http://ec.europa.eu/justice/newsroom/gender-equality/opinion/120528_en.htm.

Readers of this blog will be familiar with the University of Michigan study (the Ken Ahern / Amy Dittmar study) which demonstrated the negative impact of increased female representation on the boards of Norwegian companies after 2004. Supporters of ‘improved’ gender diversity in the boardroom have generally chosen to ignore the report – the only truly independent report on the topic – but a few have come up with some ingenious explanations for the findings. One of their more nuanced argument is that quotas may be undesirable because they force companies to draw upon an insufficient pool of women with the experience and/or expertise to perform well as directors. Those holding this view usually support the idea of the ‘pipeline problem’, i.e. ‘things must be done’ to support and enable more women to reach board positions.

It’s an appealing idea in some ways, but what has been the experience of companies which increase female representation on boards without being driven by quotas, or the threat of quotas? They will presumably have chosen those female executives with more of an eye on merit than they would have if driven by quotas. I’m indebted to a supporter for pointing me to an intriguing paper which sheds light on the impact of voluntary increases in female representation on boards. It’s an 80 page long Deutsche Bundesbank ’discussion paper’ written by two professors – Allen N Berger (University of South Carolina) and Klaus Schaeck (Bangor University) – and a DB employee, Thomas Kick. The paper is titled, ‘Executive board composition and bank risk taking’, and it concerns executive boards of German banks over 1994-2010. The following is a link to the paper:

http://www.bundesbank.de/download/volkswirtschaft/dkp/2012/201203dkp.pdf

The summary (page 4) includes the following:

We obtain the following key results. First, we show that younger executive teams increase risk-taking. Second, board changes that result in a higher proportion of female executives also lead to a more risky conduct of business.

My attention was drawn on 16 April 2012 to a British organisation, ENEI, the Employers Network for Equality & Inclusion http://enei.org.uk. From the organisation’s website:

The ENEI is the UK’s leading employer network covering all aspects of equality and inclusion issues in the workplace. In addition to supporting employers, our role is to influence Government, business and trade unions, campaigning for real practical change…

Now if any organisation can provide us with the elusive evidence for a positive causal link between gender diversity in the boardroom (‘GDITB’) and improved corporate performance, ENEI must surely be it. I emailed the three senior people in the ENEI with the following:

To:

Denise Keating, Chief Executive (denise.keating@enei.org.uk)

Dan Robertson, Diversity & Inclusion Director (dan.robertson@enei.org.uk)

Alan Beazley, Policy & Research Specialist (alan.beazley@enei.org.uk)

Good morning. For several years I’ve been searching for the evidence of the frequently and  confidently asserted positive causal link between gender diversity in the boardroom (GDITB) and improved corporate performance. I’ve contacted many leading proponents of GDITB including David Cameron, Lord Davies of Abersoch, the CBI, Helena Morrissey of the 30 percent club, the American campaigning organisation Catalyst, and many others, and none has been able to provide me with even a shred of evidence. Perhaps you have the evidence, and if so, would you be so good as to share it with me? The only evidence I can find shows a negative casual link: the Ahern/Dittmar study for the University of Michigan on Norwegian companies post 2004, and the recent Deutsche Bundesbank discussion paper on German banks over 1994-2010.

Would you be so good as to provide me with your evidence by 5pm this coming Friday, 20 April? If you cannot, or will not, I shall reluctantly be forced to conclude yet again that there is no evidence base to support the GDITB initiative. Thank you.

I shall keep you all informed of the outcome of this enquiry.

I had all but given up hoping that any major corporation might resist the odious ’gender diversity in the boardroom’ campaign. So I thank Fred for pointing out a piece in the Times of 16 April 2012 which referred to Millennium & Copthorne Hotels plc. Their ‘board diversity policy’ isn’t perfect but it’s the most intelligent board diversity policy I’ve seen in recent years in a major business:

http://www.millenniumhotels.com/corporate/investor_relations/downloads/board_diversity_policy.pdf

I shall henceforth restrict my use of hotels to M&C hotels wherever possible, and encourage acquaintances to do likewise.

In an era when the Conservatives – under a feminist prime minister, David Cameron – relentlessly pursue anti-male and pro-female agendas, it’s good to encounter dissenting voices. Increasingly those voices are associated with UKIP, the UK Independence Party, and I thank  an Italian follower of this blog, Fabrizio, for pointing me to a spirited defence of meritocracy in business from a UKIP MEP, Paul Nuttall, Deputy Leader of UKIP:

http://www.youtube.com/watch?v=v883mMUffl8

My thanks to Fred for pointing out a fascinating article published in the Telegraph last October:

http://www.telegraph.co.uk/finance/jobs/8800101/More-women-on-boards-There-arent-enough-who-are-qualified.html

The arguments put forward for more women on boards are becoming more creative and, er, absurd. Some of the arguments are made by men who really should know better. I particularly liked the argument that boards should better represent their business’s customers. I look forward to the boards of Toys R Us and Mothercare appointing more mothers and toddlers as directors.