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I’m not pulling an Anthony Weiner confession. I’m making reference to my September 29, 2009 post titled “I Want More Women.” My reasoning at the time (ok, desire) was based on a study by a group called “Catalyst” linking gender diversity on corporate boards with better financial performance.
It turns out the Catalyst study is just one of dozens of studies that tried to prove or disprove such a link. A recent article by a couple of Stanford Law School professors (available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1685615##) notes that some studies conclude that gender diversity on the board helps a firm’s performance; other studies show that it hurts performance; and yet others show that it makes no difference. The article concludes that no conclusion can be drawn.
What’s worse, gender diversity is just one of many board factors that have been studied ad nauseam and, after all that, can’t be said to affect firm performance. Studies of the “usual suspects” of poor performance: “large board size, few outside directors, little or no investment by directors, and the CEO serving as board chair … have not yielded much evidence that these usual suspects have any meaningful connection to board performance,” says the article.
As to gender diversity, the article says that the problem with the Catalyst study may be “endogeneity.” Meaning that good firms may go out and recruit women for their board. In other words, good financial performance causes gender diversity on the board, not the other way around.
I was so proud of myself, too.
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