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> “More women on corporate boards means better decisions and businesses that outperform the competition,” Atkins said in a statement. “We believe this law remai

by cm2187 4y ago

> “More women on corporate boards means better decisions and businesses that outperform the competition,” Atkins said in a statement. “We believe this law remains important, despite the disheartening ruling.” If they really believe that they would let the market make it happen. It is because they don’t really believe it that they are trying to enforce it by law.

flipbrad 4y ago
Perhaps they also believe markets are imperfect, especially over the short to medium term timescales that the current and incoming generation of women (and other people who care about these things) actually care about?
- kepler1 4y ago
  Just because someone says that they believe in something, does that mean that they're right, and that they get to force others to do anything they want based on that belief? Including discriminating against yet others?
  - kennywinker 4y ago
    If you arrived at the snack table early and grabbed 10 juice boxes, and the teacher comes and takes five of them away from you and gives them to the other kids, you're not being discriminated against.
    - kepler1 4y ago
      Thank god this kind of lazy and intellectually dishonest thinking (I hesitate to call it logic) gets checked by courts in the end.
    - taylorius 4y ago
      Yes, a teacher, and the children that are in their charge. That's exactly the attitude these politicians have. How lucky we are that they know best!
      - kennywinker 4y ago
        I know you really want it to be top down patronizing politicians doing this kind of thing all on their own, but there are actually millions of Californians who agree this is a good idea. In my metaphor, those are the adults in the room.
        taylorius 4y ago
        I'm sure that's true - I don't disagree with you. Though I would maintain politicians have a distinctly high-handed approach to dealing with such matters, and are often highly dismissive of collateral damage from their grand schemes.
        humanrebar 4y ago
        So these "adults in the room" are high and mighty about makeup of boardrooms but they refuse to build more housing? If hoarding is the metaphor, seems like that's the more apt interpretation. The average woman in California is much more affected by rent than access to board positions.
        kennywinker 4y ago
        I never said it’s a perfect system. There’s lots of times when the government isn’t doing what ANYBODY wants, but that wasn’t what we were talking about. I definitely care more about housing than boardrooms, but that wasn’t what we were talking about either.
        teakettle42 4y ago
        Your analogy is poor. A better one, if we’re going to stick with childish analogies: You achieve straight A’s for a promised juice box reward, but the teacher refuses to give it to you because you’re a boy, and too many other boys got A’s in the past.
        Swenrekcah 4y ago
        I understand your frustration because there really is the sentiment among some people today that “privileged” [1] people should be punished for the crimes of their ancestors. However a law that says that the board of a large enough company can’t be all male (and then also not all female) is actually not the stupidest idea. It should absolutely be considered a temporary stop-gap and automatically revoked as soon as some threshold of women on boards is achieved, but it actually is sometimes necessary to give people a little kick in the butt to get things going. I don’t live in California so I don’t know the specifics of this law, just saying that the idea in general is not as terrible as some of the bad woke stuff. [1] I say privileged in quotes because usually it’s enough that people look similar to people that are or have been privileged.
    - modo_mario 4y ago
      To what extent do CEO's height compare to the average?
- taylorius 4y ago
  Actually they don't think that, they don't care one way or another. They just want women on boards, and they assume the market will make it work somehow.
- roenxi 4y ago
  More likely it just isn't true. Markets respond quite aggressively to even a small change in the bottom line. Often companies are quite happy to ignore the law, common sense or basic decency to achieve a bit more profit. If they aren't lining up women for the boards voluntarily, it is because nobody with money thinks there is a benefit from doing so. The effect is probably just the so-called Berkson's paradox [0] and will likely disappear if hiring teams start seeking out female candidates. [0] https://en.wikipedia.org/wiki/Berkson%27s_paradox https://en.wikipedia.org/wiki/Berkson%27s_paradox
hectorlorenzo 4y ago
How would that happen? I'm curious because I've never seen markets as being specially good at enforcing policies that (some or most) parts of society see as morally good (as vague as these terms are). For example, markets never managed to prevent child labour (they still don't!), we had to pass laws to enforce them in Western countries. What are your specific thoughts on how would this process unfold? Edit: On a second read of the article and parent comment, I understand it now as an ironic take on a flawed justification for the law that tries to satisfy everyone ("We're doing this for the markets!").
- darawk 4y ago
  The part he quoted was about running a more efficient business (i.e. outcompeting the competition), not being morally better. Markets are generally pretty good at promoting that.
  - hectorlorenzo 4y ago
    Get it, then I think disagreement runs deeper than I thought. As a sibling comment mentioned, I believe that markets are meant to serve humans, not the other way around. Edit: typo
    - olalonde 4y ago
      The question is: is it more desirable for society to have the most competent people running a business or to have a balanced representation of gender, sexual orientation, skin color or <insert other arbitrary way to classify people here> running it? Free market proponents would argue the former is more desirable.
      - TheOtherHobbes 4y ago
        Free market proponents would be wrong. If you're excluding a significant proportion of your population from leadership roles - which is what happens predictably, almost as if by magic, when "markets" make decisions about leadership - your markets are anything but free.
kennywinker 4y ago
It's possible there is two competing market forces: 1. women on corporate boards are a competitive advantage for reasons stated above. 2. women on corporate boards are a competitive dis-advantage because of social factors based around the cultural idea that women are not normally on boards. If that's the case, then the market won't unlock the advantages of the first factor unless something happens to disrupt the second factor. I honestly don't know how anyone can believe the market will find the optimal outcome. At best it finds an optimal outcome within constraints put on it by the confused, reactionary, panicky, racist, sexist, bigoted people who are the things actually acting out "the market".
- DocTomoe 4y ago
  Wouldn't it be pretty easy to confirm or falsify the theory then? See how companies perform with more diverse boards as compared to those with less diverse boards? That information is public. This study [1] seems to have inconclusive results: > We found evidence for a positive effect of women on corporate boards on both measures of company performance—ROA and PER—apart from the percentage of female executives in the case of ROA when estimated through pooled OLS. However, the outcomes of panel data fixed-effects and random-effects revealed the lack of connection between board gender diversity and ROA but a positive impact of the number and percentage of women on board on PER. [1] https://jfin-swufe.springeropen.com/articles/10.1186/s40854-021-00265-x#Sec6 https://jfin-swufe.springeropen.com/articles/10.1186/s40854-...
  - kennywinker 4y ago
    Those studies didn’t happen in a vacuum. Imagine your company loses out on some big contract because when the some-women board shows up the all-men board at the other company’s unexamined prejudices kick in and they “just have a bad feeling about that company”. Or maybe it’s that the male faction of the board undervalues the female board members input and it’s functionally like having a smaller board. Those are kinda cartoonish examples of what I’m talking about when I say “cultural forces” - there may be all kinds of hard to quantify hard to control for effects at work. But if those effects would go away if the cultural stereotypes and biases went away, then maybe a law like that would push a skewed system towards one that provides equal opportunity for everyone
niemandhier 4y ago
Gathering data to investigate this is tricky, you cannot really run a randomized controlled trial, so everything is always observational. This meta analysis study suggests that the suggests that the effect size of having a woman in the board is negligible, but the average number of women in the boards of the considered companies was low: https://www.researchgate.net/publication/276057102_Does_Gender_Matter_Females_on_Corporate_Boards_and_Firm_Financial_Performance_-_A_Meta-Analysis https://www.researchgate.net/publication/276057102_Does_Gend... However more recent research finds a positive effect if the number of woman is higher ( they do not report an effect size though): https://jfin-swufe.springeropen.com/articles/10.1186/s40854-021-00265-x https://jfin-swufe.springeropen.com/articles/10.1186/s40854-... This invites a "Laffer curve" like argument: surly we just do not have enough female board members jet.
krageon 4y ago
> If they really believe that they would let the market make it happen "The market" is not an entity. It's a collective of people, those people have prejudices and friends. Those primarily factor into what happens - thus, more of the same in-group ends up at the top. This is frankly such a base explanation it's bordering on bad-faith reasoning, but I'm willing to give you the benefit of the doubt.
benhurmarcel 4y ago
You haven't spent a lot of time in large companies if you believe they always choose what makes the most economic sense.
HelloMcFly 4y ago
Forgive the eye-roll, but this is classic HN reductionism. How many things can you think of - right now - for which there is clear evidence of benefit yet society has not adopted action? Systemic change is slow, sometimes laws help advance systemic change. The gender disparity gap in leadership is closing, but network effects will continue to operate to create inequitible opportunity for quite some time.
- cm2187 4y ago
  In term of things that are more profitable, companies tend to be very good at optimising for that, that’s the nature of a free market, economic darwinism through competition. If your objective is equity, not economic performance, then it’s a different objective but that’s not the one quoted by the senator.
  - HelloMcFly 4y ago
    Companies exist within systems that are more than just "pure capitalism", and whose individual-level actors (who often hold decision-making authority) are motivated by more than just "maximizing company returns". The free market is not some independent force of physics, it's operating in a highly complex, multi-factorial society with individual actors and competing forces. For instance: I have seen people lobby for hires - yes, including two instances of appointing board members - based on personal associations vs. a sober-eyed review of qualifications (guess which gender typically benefits?). The idea that "if it was better the market will make it so" may be right in the fullness of time, but we live in what is effectively a zero-sum society when viewing the present. Patience for the long-tail of change advantages the already advantaged.
- honkdaddy 4y ago
  >How many things can you think of - right now - for which there is clear evidence of benefit yet society has not adopted action Which ones can you think of? Keep in mind the article is talking about markets and fiscal health of the company itself, not society as a whole. It's pretty easy to make the case "society would be better if we did the beneficial things", the question at hand is whether it's the governments place to push these on private actors.

by cm2187 4y ago

flipbrad 4y ago

Perhaps they also believe markets are imperfect, especially over the short to medium term timescales that the current and incoming generation of women (and other people who care about these things) actually care about?

kepler1 4y ago
Just because someone says that they believe in something, does that mean that they're right, and that they get to force others to do anything they want based on that belief? Including discriminating against yet others?
- kennywinker 4y ago
  If you arrived at the snack table early and grabbed 10 juice boxes, and the teacher comes and takes five of them away from you and gives them to the other kids, you're not being discriminated against.
  - kepler1 4y ago
    Thank god this kind of lazy and intellectually dishonest thinking (I hesitate to call it logic) gets checked by courts in the end.
  - taylorius 4y ago
    Yes, a teacher, and the children that are in their charge. That's exactly the attitude these politicians have. How lucky we are that they know best!
    - kennywinker 4y ago
      I know you really want it to be top down patronizing politicians doing this kind of thing all on their own, but there are actually millions of Californians who agree this is a good idea. In my metaphor, those are the adults in the room.
      - taylorius 4y ago
        I'm sure that's true - I don't disagree with you. Though I would maintain politicians have a distinctly high-handed approach to dealing with such matters, and are often highly dismissive of collateral damage from their grand schemes.
      - humanrebar 4y ago
        So these "adults in the room" are high and mighty about makeup of boardrooms but they refuse to build more housing? If hoarding is the metaphor, seems like that's the more apt interpretation. The average woman in California is much more affected by rent than access to board positions.
        kennywinker 4y ago
        I never said it’s a perfect system. There’s lots of times when the government isn’t doing what ANYBODY wants, but that wasn’t what we were talking about. I definitely care more about housing than boardrooms, but that wasn’t what we were talking about either.
      - teakettle42 4y ago
        Your analogy is poor. A better one, if we’re going to stick with childish analogies: You achieve straight A’s for a promised juice box reward, but the teacher refuses to give it to you because you’re a boy, and too many other boys got A’s in the past.
        Swenrekcah 4y ago
        I understand your frustration because there really is the sentiment among some people today that “privileged” [1] people should be punished for the crimes of their ancestors. However a law that says that the board of a large enough company can’t be all male (and then also not all female) is actually not the stupidest idea. It should absolutely be considered a temporary stop-gap and automatically revoked as soon as some threshold of women on boards is achieved, but it actually is sometimes necessary to give people a little kick in the butt to get things going. I don’t live in California so I don’t know the specifics of this law, just saying that the idea in general is not as terrible as some of the bad woke stuff. [1] I say privileged in quotes because usually it’s enough that people look similar to people that are or have been privileged.
  - modo_mario 4y ago
    To what extent do CEO's height compare to the average?
taylorius 4y ago
Actually they don't think that, they don't care one way or another. They just want women on boards, and they assume the market will make it work somehow.
roenxi 4y ago
More likely it just isn't true. Markets respond quite aggressively to even a small change in the bottom line. Often companies are quite happy to ignore the law, common sense or basic decency to achieve a bit more profit. If they aren't lining up women for the boards voluntarily, it is because nobody with money thinks there is a benefit from doing so. The effect is probably just the so-called Berkson's paradox [0] and will likely disappear if hiring teams start seeking out female candidates. [0] https://en.wikipedia.org/wiki/Berkson%27s_paradox https://en.wikipedia.org/wiki/Berkson%27s_paradox

hectorlorenzo 4y ago

How would that happen? I'm curious because I've never seen markets as being specially good at enforcing policies that (some or most) parts of society see as morally good (as vague as these terms are). For example, markets never managed to prevent child labour (they still don't!), we had to pass laws to enforce them in Western countries. What are your specific thoughts on how would this process unfold? Edit: On a second read of the article and parent comment, I understand it now as an ironic take on a flawed justification for the law that tries to satisfy everyone ("We're doing this for the markets!").

darawk 4y ago
The part he quoted was about running a more efficient business (i.e. outcompeting the competition), not being morally better. Markets are generally pretty good at promoting that.
- hectorlorenzo 4y ago
  Get it, then I think disagreement runs deeper than I thought. As a sibling comment mentioned, I believe that markets are meant to serve humans, not the other way around. Edit: typo
  - olalonde 4y ago
    The question is: is it more desirable for society to have the most competent people running a business or to have a balanced representation of gender, sexual orientation, skin color or <insert other arbitrary way to classify people here> running it? Free market proponents would argue the former is more desirable.
    - TheOtherHobbes 4y ago
      Free market proponents would be wrong. If you're excluding a significant proportion of your population from leadership roles - which is what happens predictably, almost as if by magic, when "markets" make decisions about leadership - your markets are anything but free.

kennywinker 4y ago

It's possible there is two competing market forces: 1. women on corporate boards are a competitive advantage for reasons stated above. 2. women on corporate boards are a competitive dis-advantage because of social factors based around the cultural idea that women are not normally on boards. If that's the case, then the market won't unlock the advantages of the first factor unless something happens to disrupt the second factor. I honestly don't know how anyone can believe the market will find the optimal outcome. At best it finds an optimal outcome within constraints put on it by the confused, reactionary, panicky, racist, sexist, bigoted people who are the things actually acting out "the market".

DocTomoe 4y ago
Wouldn't it be pretty easy to confirm or falsify the theory then? See how companies perform with more diverse boards as compared to those with less diverse boards? That information is public. This study [1] seems to have inconclusive results: > We found evidence for a positive effect of women on corporate boards on both measures of company performance—ROA and PER—apart from the percentage of female executives in the case of ROA when estimated through pooled OLS. However, the outcomes of panel data fixed-effects and random-effects revealed the lack of connection between board gender diversity and ROA but a positive impact of the number and percentage of women on board on PER. [1] https://jfin-swufe.springeropen.com/articles/10.1186/s40854-021-00265-x#Sec6 https://jfin-swufe.springeropen.com/articles/10.1186/s40854-...
- kennywinker 4y ago
  Those studies didn’t happen in a vacuum. Imagine your company loses out on some big contract because when the some-women board shows up the all-men board at the other company’s unexamined prejudices kick in and they “just have a bad feeling about that company”. Or maybe it’s that the male faction of the board undervalues the female board members input and it’s functionally like having a smaller board. Those are kinda cartoonish examples of what I’m talking about when I say “cultural forces” - there may be all kinds of hard to quantify hard to control for effects at work. But if those effects would go away if the cultural stereotypes and biases went away, then maybe a law like that would push a skewed system towards one that provides equal opportunity for everyone

niemandhier 4y ago

Gathering data to investigate this is tricky, you cannot really run a randomized controlled trial, so everything is always observational. This meta analysis study suggests that the suggests that the effect size of having a woman in the board is negligible, but the average number of women in the boards of the considered companies was low: https://www.researchgate.net/publication/276057102_Does_Gender_Matter_Females_on_Corporate_Boards_and_Firm_Financial_Performance_-_A_Meta-Analysis https://www.researchgate.net/publication/276057102_Does_Gend... However more recent research finds a positive effect if the number of woman is higher ( they do not report an effect size though): https://jfin-swufe.springeropen.com/articles/10.1186/s40854-021-00265-x https://jfin-swufe.springeropen.com/articles/10.1186/s40854-... This invites a "Laffer curve" like argument: surly we just do not have enough female board members jet.

krageon 4y ago

> If they really believe that they would let the market make it happen "The market" is not an entity. It's a collective of people, those people have prejudices and friends. Those primarily factor into what happens - thus, more of the same in-group ends up at the top. This is frankly such a base explanation it's bordering on bad-faith reasoning, but I'm willing to give you the benefit of the doubt.

benhurmarcel 4y ago

You haven't spent a lot of time in large companies if you believe they always choose what makes the most economic sense.

HelloMcFly 4y ago

Forgive the eye-roll, but this is classic HN reductionism. How many things can you think of - right now - for which there is clear evidence of benefit yet society has not adopted action? Systemic change is slow, sometimes laws help advance systemic change. The gender disparity gap in leadership is closing, but network effects will continue to operate to create inequitible opportunity for quite some time.

cm2187 4y ago
In term of things that are more profitable, companies tend to be very good at optimising for that, that’s the nature of a free market, economic darwinism through competition. If your objective is equity, not economic performance, then it’s a different objective but that’s not the one quoted by the senator.
- HelloMcFly 4y ago
  Companies exist within systems that are more than just "pure capitalism", and whose individual-level actors (who often hold decision-making authority) are motivated by more than just "maximizing company returns". The free market is not some independent force of physics, it's operating in a highly complex, multi-factorial society with individual actors and competing forces. For instance: I have seen people lobby for hires - yes, including two instances of appointing board members - based on personal associations vs. a sober-eyed review of qualifications (guess which gender typically benefits?). The idea that "if it was better the market will make it so" may be right in the fullness of time, but we live in what is effectively a zero-sum society when viewing the present. Patience for the long-tail of change advantages the already advantaged.
honkdaddy 4y ago
>How many things can you think of - right now - for which there is clear evidence of benefit yet society has not adopted action Which ones can you think of? Keep in mind the article is talking about markets and fiscal health of the company itself, not society as a whole. It's pretty easy to make the case "society would be better if we did the beneficial things", the question at hand is whether it's the governments place to push these on private actors.