6 ms·

Stocks Perform Better if Women Are on Company Boards

29 points by roguecoder 14y ago

Zenst 14y ago
Whilst a attention grabbing headline article I'd be more interested in a better breakdown and also a more uptodate one given "according to a report by the Credit Suisse Research Institute, created in 2008 to analyze trends expected to affect global markets.". So thats 2008, four years ago. Things have moved on, but why is this only now making the news? Diversity is always good and the size of boards, statisticaly for them to not have one single women would be indicative of a narror mindset and also one that is less able to adapt - period. So in that this is hardly supprising in any way. Not a greatly written article and I say that as they quote a 2008 report and then go on about companies who were not even a factor in 2008, which to me seems somewhat attention news based. Still simple fact that say a board of 12 people has no women and fails to adapt as well as a board that has some is perhaps obvious to me and many others. Now the question I'd ask is if you had a all women board would they perform as well and if that was the case, then I'd say the battle of the sex's is over and women won at board level. Sadly there isn't enough data to even touch upon that question, one day. Still I'd like to see boards made up of people who can do the job, nomatter there sex, preferences, colour or whatever. But I also understand the bias's and hurdles many face and in that I'm all for boards having women on them, I just hope it is done for the right reasons and not a case of we saw some old report and now need a token women to make our shares look good approach. One last thought, those who are on boards, clearly are exceptional people as they have had to stand out above the many forms of descrimination that legacy has to offer. So is it becasue there women or just exceptional good at what they do and in that measuring things and putting a sex label on it is in many ways the kind of mentality that has limited many women getting to were they deserve.
- deleted 14y ago
  [deleted]
Uchikoma 14y ago
Not only cause and correlation but what's the cause? Do companies with women on their board perform better, or do companies that perform better take women into their boards. Do companies that have the mindset to take on less dept, have the mindset to encourage women to take board positions, or do companies with women in board positions get a mindset to take on less dept. Do companies that perform better take on less dept or do companies that take on less dept perform better. The article is inconclusive for me. (I personally think women in director positions are a good thing because an all-men board obviously can't consist of the best people available)
- dinkumthinkum 14y ago
  I don't understand your last statement. Why is it obvious that an all-men board can't consist of the best people?
  - vacri 14y ago
    A merit-based company doesn't care about genitals, whereas a boys' club company cuts out 50% of potentially meritorious workers (though I agree the idea was poorly worded)
    - nagrom 14y ago
      A board that must necessarily select only men may not be composed of the best people available, but a board that happens to consist only of men may, in fact, have the best people available...looking a posteriori at a group's gender composition is not very helpful.
      - vacri 14y ago
        though I agree the idea was poorly worded
- chroma 14y ago
  (I personally think women in director positions are a good thing because an all-men board obviously can't consist of the best people available) I don't want to turn this into a flame war about gender, but this does not seem obvious to me. It's certainly not the case in other fields. For example, the best mathematicians are predominantly male. (No female has ever won the Fields Medal or Abel Prize.) The same goes for computer science (only two women have won the Turing Award). I'm not saying there's no inertia or social dynamics involved, but publicly-traded companies have large incentives to select the best board members they can find. Considering these incentives, a massive imbalance would make sense if one gender was better at running public companies.
ChrisNorstrom 14y ago
"So is it because they're women or just exceptionally good at what they do?" Both. Women are biologically known to diversify their risks much more than men. Both in life and in business. Companies started by women have a much smaller chance of failing and reach profitability much sooner. Female business owners are more steady and less risky. Male business owners tend to take more risk, thus getting ahead faster but at the cost of failing much faster as well. The reason we don't see big companies started by women is that taking "crazy risks" are usually a masculine trait caused by testosterone. And in order to win quickly you have to take a lot more risk. When women are administered testosterone they become more aggressive, masculine in risk taking analysis, and violent. In both men and women, the more testosterone the subject's body produces the more violent, aggressive, commanding, and confident the subject is. These findings from many studies over the course of decades. From testosterone injections in women to checking the testosterone levels of prison inmates (surprise! the most violent inmates had the highest levels of testosterone). Testosterone provides a boost in confidence and dominance but as a side effect a boost in violence and aggression. This also explains why men who hold children, even if it's a doll, had immediate decreases in testosterone levels. It's a sort of evolutionary response to try to prevent men from harming their offspring. Historicall, almost every war or genocide in human history was caused, planned, and carried out exclusively by men. People don't like hearing those studies, they like to think that they're in control of their own life and are not slaves to their gender, genitals, or hormones. But the evidence clearly shows that we are not as much in control of ourselves as we think we are. Too many men, like too much testosterone, is not a good thing. (see - testosterone's role in wallstreet's collapse http://www.businessweek.com/articles/2012-05-31/managing-wall-streets-winner-effect http://www.businessweek.com/articles/2012-05-31/managing-wal...) In the old economy [More risk = higher rewards] so the men won that round. Of course the worldwide economic slump is changing that. Right now it's more important to slowly grow your company safely, plan for the long term instead of the short term, and keep the company you have while growing slowly. The only two groups of people that are more prone to follow those rules are 1) women and 2)men with low testosterone levels. So in this economic downturn women are really going to shine, which is hopefully going to open the door to more opportunities in government and leadership positions. I for one am very happy to see this, we've seen what the men have done/caused, it's time to see how the women will handle things.
obilgic 14y ago
what about companies with no men on board?
- Claudus 14y ago
  Well, clearly, there is a strong correlation between a company existing and men being on the board.
dinkumthinkum 14y ago
Wow, I think anyone with any basic logic course under their belt can see many cause and effect fallacies going on here. I'd expect a little more from Bloomberg. Is it that they perform better because there are women on the board, that women make better decision, or that companies that perform better are more likely to also have women on the board? It could be any number of things and any reasonable person wouldn't even need these things spelled out for them.
- einhverfr 14y ago
  Indeed not only that could be that mixing genders means mixing perspectives and this leads to better decision-making. Additionally if a business is seen as a riskier investment does this mean that women would be less interested in investing time/money in it?
  - kolinko 14y ago
    If mixing perspectives is better for boards, does it mean they would benefit from putting more anarchists, Inuits and children on board? They also deliver other perspectives.
    - einhverfr 14y ago
      You know, Quakers still give children over a certain age (depending on meeting, maybe 7) full veto power over meeting business. And anarchists might have some helpful insights. I don't know what you have against Inuits though.
      - kolinko 14y ago
        I'd say that if you'd bring in an average Inuit into a board meeting, you'd have some language problems, and you'd have to explain a lot of things to him. My argument is that there is such a thing as "too much diversity" - if a group that has to make some kind of a decision is too diverse, it will have communication problems. Therefore it's not as simple as saying "oh, anything that brings in more diversity is better for a board".
p_sherman 14y ago
Correlation vs. Causation. Good day.
Tichy 14y ago
World wide? So among other questions to come to mind, maybe companies in some countries happened to perform better than in other countries. For example if companies in liberal countries performed better, they would be likely to also have more female board members.

29 points by roguecoder 14y ago

Zenst 14y ago

Whilst a attention grabbing headline article I'd be more interested in a better breakdown and also a more uptodate one given "according to a report by the Credit Suisse Research Institute, created in 2008 to analyze trends expected to affect global markets.". So thats 2008, four years ago. Things have moved on, but why is this only now making the news? Diversity is always good and the size of boards, statisticaly for them to not have one single women would be indicative of a narror mindset and also one that is less able to adapt - period. So in that this is hardly supprising in any way. Not a greatly written article and I say that as they quote a 2008 report and then go on about companies who were not even a factor in 2008, which to me seems somewhat attention news based. Still simple fact that say a board of 12 people has no women and fails to adapt as well as a board that has some is perhaps obvious to me and many others. Now the question I'd ask is if you had a all women board would they perform as well and if that was the case, then I'd say the battle of the sex's is over and women won at board level. Sadly there isn't enough data to even touch upon that question, one day. Still I'd like to see boards made up of people who can do the job, nomatter there sex, preferences, colour or whatever. But I also understand the bias's and hurdles many face and in that I'm all for boards having women on them, I just hope it is done for the right reasons and not a case of we saw some old report and now need a token women to make our shares look good approach. One last thought, those who are on boards, clearly are exceptional people as they have had to stand out above the many forms of descrimination that legacy has to offer. So is it becasue there women or just exceptional good at what they do and in that measuring things and putting a sex label on it is in many ways the kind of mentality that has limited many women getting to were they deserve.

deleted 14y ago
[deleted]

Uchikoma 14y ago

Not only cause and correlation but what's the cause? Do companies with women on their board perform better, or do companies that perform better take women into their boards. Do companies that have the mindset to take on less dept, have the mindset to encourage women to take board positions, or do companies with women in board positions get a mindset to take on less dept. Do companies that perform better take on less dept or do companies that take on less dept perform better. The article is inconclusive for me. (I personally think women in director positions are a good thing because an all-men board obviously can't consist of the best people available)

dinkumthinkum 14y ago
I don't understand your last statement. Why is it obvious that an all-men board can't consist of the best people?
- vacri 14y ago
  A merit-based company doesn't care about genitals, whereas a boys' club company cuts out 50% of potentially meritorious workers (though I agree the idea was poorly worded)
  - nagrom 14y ago
    A board that must necessarily select only men may not be composed of the best people available, but a board that happens to consist only of men may, in fact, have the best people available...looking a posteriori at a group's gender composition is not very helpful.
    - vacri 14y ago
      though I agree the idea was poorly worded
chroma 14y ago
(I personally think women in director positions are a good thing because an all-men board obviously can't consist of the best people available) I don't want to turn this into a flame war about gender, but this does not seem obvious to me. It's certainly not the case in other fields. For example, the best mathematicians are predominantly male. (No female has ever won the Fields Medal or Abel Prize.) The same goes for computer science (only two women have won the Turing Award). I'm not saying there's no inertia or social dynamics involved, but publicly-traded companies have large incentives to select the best board members they can find. Considering these incentives, a massive imbalance would make sense if one gender was better at running public companies.

ChrisNorstrom 14y ago

"So is it because they're women or just exceptionally good at what they do?" Both. Women are biologically known to diversify their risks much more than men. Both in life and in business. Companies started by women have a much smaller chance of failing and reach profitability much sooner. Female business owners are more steady and less risky. Male business owners tend to take more risk, thus getting ahead faster but at the cost of failing much faster as well. The reason we don't see big companies started by women is that taking "crazy risks" are usually a masculine trait caused by testosterone. And in order to win quickly you have to take a lot more risk. When women are administered testosterone they become more aggressive, masculine in risk taking analysis, and violent. In both men and women, the more testosterone the subject's body produces the more violent, aggressive, commanding, and confident the subject is. These findings from many studies over the course of decades. From testosterone injections in women to checking the testosterone levels of prison inmates (surprise! the most violent inmates had the highest levels of testosterone). Testosterone provides a boost in confidence and dominance but as a side effect a boost in violence and aggression. This also explains why men who hold children, even if it's a doll, had immediate decreases in testosterone levels. It's a sort of evolutionary response to try to prevent men from harming their offspring. Historicall, almost every war or genocide in human history was caused, planned, and carried out exclusively by men. People don't like hearing those studies, they like to think that they're in control of their own life and are not slaves to their gender, genitals, or hormones. But the evidence clearly shows that we are not as much in control of ourselves as we think we are. Too many men, like too much testosterone, is not a good thing. (see - testosterone's role in wallstreet's collapse http://www.businessweek.com/articles/2012-05-31/managing-wall-streets-winner-effect http://www.businessweek.com/articles/2012-05-31/managing-wal...) In the old economy [More risk = higher rewards] so the men won that round. Of course the worldwide economic slump is changing that. Right now it's more important to slowly grow your company safely, plan for the long term instead of the short term, and keep the company you have while growing slowly. The only two groups of people that are more prone to follow those rules are 1) women and 2)men with low testosterone levels. So in this economic downturn women are really going to shine, which is hopefully going to open the door to more opportunities in government and leadership positions. I for one am very happy to see this, we've seen what the men have done/caused, it's time to see how the women will handle things.

obilgic 14y ago

what about companies with no men on board?

Claudus 14y ago
Well, clearly, there is a strong correlation between a company existing and men being on the board.

dinkumthinkum 14y ago

Wow, I think anyone with any basic logic course under their belt can see many cause and effect fallacies going on here. I'd expect a little more from Bloomberg. Is it that they perform better because there are women on the board, that women make better decision, or that companies that perform better are more likely to also have women on the board? It could be any number of things and any reasonable person wouldn't even need these things spelled out for them.

einhverfr 14y ago
Indeed not only that could be that mixing genders means mixing perspectives and this leads to better decision-making. Additionally if a business is seen as a riskier investment does this mean that women would be less interested in investing time/money in it?
- kolinko 14y ago
  If mixing perspectives is better for boards, does it mean they would benefit from putting more anarchists, Inuits and children on board? They also deliver other perspectives.
  - einhverfr 14y ago
    You know, Quakers still give children over a certain age (depending on meeting, maybe 7) full veto power over meeting business. And anarchists might have some helpful insights. I don't know what you have against Inuits though.
    - kolinko 14y ago
      I'd say that if you'd bring in an average Inuit into a board meeting, you'd have some language problems, and you'd have to explain a lot of things to him. My argument is that there is such a thing as "too much diversity" - if a group that has to make some kind of a decision is too diverse, it will have communication problems. Therefore it's not as simple as saying "oh, anything that brings in more diversity is better for a board".

p_sherman 14y ago

Correlation vs. Causation. Good day.

Tichy 14y ago

World wide? So among other questions to come to mind, maybe companies in some countries happened to perform better than in other countries. For example if companies in liberal countries performed better, they would be likely to also have more female board members.