More on gender and analytical problems

Here is another interesting story with a gender angle. A study shows that stockholders in companies with women in the Board achieved better returns than those without.
The obvious and likely correct point is that women add something valuable to the Board and is the company performs better. Diversity is a good thing in general, not least when it comes to considering complex issues with multiple stakeholders. It makes a good deal of sense to get this result.

Of course it’s not the only possible reason. It’s also not absolute proof that putting women onto a men-only Board would improve performance.

The problem is cause and effect. It might be that enlightened Boards add well-performing companies are more likely to add women to their Board. It might be that successful companies spend the time to get their Board composition right.

Finally, it might be stronger than the diversity argument. Women may simply be better at running companies than men. It’s a pity there are too few women-only boards to compare their performance to help answer the question whether women are better board members than men or is the benefit simply one of diversity. Interesting implications for other forms of diversity on Boards too.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.