4 ms·

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 boar

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
- DocTomoe 4y ago
  To be fair, that sounds a bit like a fallacy ... if a diverse board leads to comparatively better outcomes, it's the fact that they were diverse, but if it doesn't, it's the fault of everyone not trusting the female-identifying board members enough? If you're bringing up a claim or a hypothesis in a discussion, you need to allow for the claim to be falsifiable.
  - kennywinker 4y ago
    I'm not making a claim. I'm describing a potential mechanism. The start of this thread was a question like "if women make boards better, why doesn't the market put them in those seats", so I was describing the type of system that could be at play - i.e. cultural inertia counteracting the benefits. There is, I believe, plenty of evidence in the literature of cultural factors like stereotypes, preconceptions, and prejudices having a very real impact on group performance. But that's not a specific claim about WHICH factors are at play in this circumstance. You posted a study that seems to show no impact when adding women to boards, so I was pointing out how a study that doesn't control for those kinds of cultural inertia factors can't say anything about the existence or non-existence of those factors. As for the specific example "if a diverse board leads to comparatively better outcomes, it's the fact that they were diverse, but if it doesn't, it's the fault of everyone not trusting the female-identifying board members enough" which you describe as an un-falsifiable claim, but it's not. Something as simple as an analysis of meeting calendars or emails on diverse and non-diverse boards might be able to determine if the communication patterns are a negative or positive influence on performance.
    - DocTomoe 4y ago
      In the end, from a corporate investor level, it's all about the bottom line. Overperformance and underperformance are well-defined terms. If there is a (positive or negative) correlation between ratio of male and female board members and performance, investors won't look twice at more obscure facets like 'meeting patterns' or 'cultural inertia'. If the original claim ("Companies perform better with more women on boards") is not provable in a comparatively simple metric like growth, and if there are indications that in fact, 'other factors' like cultural inertia currently is diametral to female success in boards, then making a law that shoehorns more women in boards is not designed to make companies perform better, but to change the assumed cultural inertia at the expense of short- to medium-term economic growth. It becomes an experiment - with the countries that do not have that kind of laws and are unlikely to implement them as a control group (looking at you, China). It only would be fair to tell that - instead of painting an unproven (and to some extend: disproven) claim a fact.
thematrixturtle 4y ago
Here's the SSGA Gender Diversity Index ETF vs the DJI. Alas, so far the experiment does not seem to be bearing out the hypothesis. https://finance.yahoo.com/chart/SHE#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 https://finance.yahoo.com/chart/SHE#eyJpbnRlcnZhbCI6IndlZWsi...

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

DocTomoe 4y ago
To be fair, that sounds a bit like a fallacy ... if a diverse board leads to comparatively better outcomes, it's the fact that they were diverse, but if it doesn't, it's the fault of everyone not trusting the female-identifying board members enough? If you're bringing up a claim or a hypothesis in a discussion, you need to allow for the claim to be falsifiable.
- kennywinker 4y ago
  I'm not making a claim. I'm describing a potential mechanism. The start of this thread was a question like "if women make boards better, why doesn't the market put them in those seats", so I was describing the type of system that could be at play - i.e. cultural inertia counteracting the benefits. There is, I believe, plenty of evidence in the literature of cultural factors like stereotypes, preconceptions, and prejudices having a very real impact on group performance. But that's not a specific claim about WHICH factors are at play in this circumstance. You posted a study that seems to show no impact when adding women to boards, so I was pointing out how a study that doesn't control for those kinds of cultural inertia factors can't say anything about the existence or non-existence of those factors. As for the specific example "if a diverse board leads to comparatively better outcomes, it's the fact that they were diverse, but if it doesn't, it's the fault of everyone not trusting the female-identifying board members enough" which you describe as an un-falsifiable claim, but it's not. Something as simple as an analysis of meeting calendars or emails on diverse and non-diverse boards might be able to determine if the communication patterns are a negative or positive influence on performance.
  - DocTomoe 4y ago
    In the end, from a corporate investor level, it's all about the bottom line. Overperformance and underperformance are well-defined terms. If there is a (positive or negative) correlation between ratio of male and female board members and performance, investors won't look twice at more obscure facets like 'meeting patterns' or 'cultural inertia'. If the original claim ("Companies perform better with more women on boards") is not provable in a comparatively simple metric like growth, and if there are indications that in fact, 'other factors' like cultural inertia currently is diametral to female success in boards, then making a law that shoehorns more women in boards is not designed to make companies perform better, but to change the assumed cultural inertia at the expense of short- to medium-term economic growth. It becomes an experiment - with the countries that do not have that kind of laws and are unlikely to implement them as a control group (looking at you, China). It only would be fair to tell that - instead of painting an unproven (and to some extend: disproven) claim a fact.

thematrixturtle 4y ago

Here's the SSGA Gender Diversity Index ETF vs the DJI. Alas, so far the experiment does not seem to be bearing out the hypothesis. https://finance.yahoo.com/chart/SHE#eyJpbnRlcnZhbCI6IndlZWsiLCJwZXJpb2RpY2l0eSI6MSwidGltZVVuaXQiOm51bGwsImNhbmRsZVdpZHRoIjo2LjIwNjg5NjU1MTcyNDEzOCwiZmxpcHBlZCI6ZmFsc2UsInZvbHVtZVVuZGVybGF5Ijp0cnVlLCJhZGoiOnRydWUsImNyb3NzaGFpciI6dHJ1ZSwiY2hhcnRUeXBlIjoibGluZSIsImV4dGVuZGVkIjpmYWxzZSwibWFya2V0U2Vzc2lvbnMiOnt9LCJhZ2dyZWdhdGlvblR5cGUiOiJvaGxjIiwiY2hhcnRTY2FsZSI6InBlcmNlbnQiLCJzdHVkaWVzIjp7IuKAjHZvbCB1bmRy4oCMIjp7InR5cGUiOiJ2b2wgdW5kciIsImlucHV0cyI6eyJpZCI6IuKAjHZvbCB1bmRy4oCMIiwiZGlzcGxheSI6IuKAjHZvbCB1bmRy4oCMIn0sIm91dHB1dHMiOnsiVXAgVm9sdW1lIjoiIzAwYjA2MSIsIkRvd24gVm9sdW1lIjoiI2ZmMzMzYSJ9LCJwYW5lbCI6ImNoYXJ0IiwicGFyYW1ldGVycyI6eyJ3aWR0aEZhY3RvciI6MC40NSwiY2hhcnROYW1lIjoiY2hhcnQifX19LCJwYW5lbHMiOnsiY2hhcnQiOnsicGVyY2VudCI6MSwiZGlzcGxheSI6IlNIRSIsImNoYXJ0TmFtZSI6ImNoYXJ0IiwiaW5kZXgiOjAsInlBeGlzIjp7Im5hbWUiOiJjaGFydCIsInBvc2l0aW9uIjpudWxsfSwieWF4aXNMSFMiOltdLCJ5YXhpc1JIUyI6WyJjaGFydCIsIuKAjHZvbCB1bmRy4oCMIl19fSwic2V0U3BhbiI6eyJtdWx0aXBsaWVyIjo1LCJiYXNlIjoieWVhciIsInBlcmlvZGljaXR5Ijp7InBlcmlvZCI6MSwiaW50ZXJ2YWwiOiJ3ZWVrIn19LCJsaW5lV2lkdGgiOjIsInN0cmlwZWRCYWNrZ3JvdW5kIjp0cnVlLCJldmVudHMiOnRydWUsImNvbG9yIjoiIzAwODFmMiIsInN0cmlwZWRCYWNrZ3JvdWQiOnRydWUsImV2ZW50TWFwIjp7ImNvcnBvcmF0ZSI6eyJkaXZzIjp0cnVlLCJzcGxpdHMiOnRydWV9LCJzaWdEZXYiOnt9fSwic3ltYm9scyI6W3sic3ltYm9sIjoiU0hFIiwic3ltYm9sT2JqZWN0Ijp7InN5bWJvbCI6IlNIRSIsInF1b3RlVHlwZSI6IkVURiIsImV4Y2hhbmdlVGltZVpvbmUiOiJBbWVyaWNhL05ld19Zb3JrIn0sInBlcmlvZGljaXR5IjoxLCJpbnRlcnZhbCI6IndlZWsiLCJ0aW1lVW5pdCI6bnVsbCwic2V0U3BhbiI6eyJtdWx0aXBsaWVyIjo1LCJiYXNlIjoieWVhciIsInBlcmlvZGljaXR5Ijp7InBlcmlvZCI6MSwiaW50ZXJ2YWwiOiJ3ZWVrIn19fSx7InN5bWJvbCI6Il5ESkkiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiXkRKSSJ9LCJwZXJpb2RpY2l0eSI6MSwiaW50ZXJ2YWwiOiJ3ZWVrIiwidGltZVVuaXQiOm51bGwsInNldFNwYW4iOnsibXVsdGlwbGllciI6NSwiYmFzZSI6InllYXIiLCJwZXJpb2RpY2l0eSI6eyJwZXJpb2QiOjEsImludGVydmFsIjoid2VlayJ9fSwiaWQiOiJeREpJIiwicGFyYW1ldGVycyI6eyJjb2xvciI6IiM3MmQzZmYiLCJ3aWR0aCI6MiwiaXNDb21wYXJpc29uIjp0cnVlLCJzaGFyZVlBeGlzIjp0cnVlLCJjaGFydE5hbWUiOiJjaGFydCIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJeREpJIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOiJeREpJIiwiZ2FwRGlzcGxheVN0eWxlIjoidHJhbnNwYXJlbnQiLCJuYW1lIjoiXkRKSSIsIm92ZXJDaGFydCI6dHJ1ZSwidXNlQ2hhcnRMZWdlbmQiOnRydWUsImhlaWdodFBlcmNlbnRhZ2UiOjAuNywib3BhY2l0eSI6MSwiaGlnaGxpZ2h0YWJsZSI6dHJ1ZSwidHlwZSI6ImxpbmUiLCJzdHlsZSI6InN0eF9saW5lX2NoYXJ0IiwiaGlnaGxpZ2h0IjpmYWxzZX19XSwiY3VzdG9tUmFuZ2UiOm51bGx9 https://finance.yahoo.com/chart/SHE#eyJpbnRlcnZhbCI6IndlZWsi...