Sean O'Grady of Independent Minds has a snarky sexist gem of a retort to UK politician and Labour Party Chair Harriet Harman's assertion that more women in boardrooms would be better for companies. He says, hell no, "girls."
O'Grady asserts that social science research from the London School of Economics (already proven a bastion of post-feminist sentiment by Satoshi Kanazawa), shows that companies with more women on the boards are less profitable.
However the researchers also found that, on average, firms with proportionally more women on their boards are less profitable and have a lower market value. This suggests that in well-governed companies increased monitoring could have a negative effect.
Um, no. Correlation doesn't equal causation. There are at least half a dozen other way I can think of to explain that correlation other than women make companies less profitable — including one O'Grady mentions and then ignores.
They found boards with more women are more effective when looking at measures such as the monitoring of chief executive, for example, being more likely to be replaced for poor share price performance.
In other words, women are more keen to root out corruption and poor-performance. How awful want to monitor chief executives!
So, an alternate explanation is that the companies without women on their boards aren't simply more profitable, full stop. It might well be that they are profitable in the short term at the expense of long term sustainable growth (see also: Enron, nearly every bank, AIG, etc), which isn't good for the businesses in question. It could be that companies that have achieved even sustained and sustainable success with all-white, all-male boards see no reason to upset the status quo and thus replace themselves with like people. It could be that, given the structural obstacles for women and people of color to the kind of business success that lands one on a corporate board, there is simply a limited supply (and thus too small a sample size, say) to be able to draw accurate conclusions of how the business world would function if its upper echelons were not dominated by white men.
Or, it could be that those women, with their silly and archaic insistence on performing the functions of a member of a corporate board — oversight — rather than just kowtowing to the demands of smart man who's the CEO are making all the companies they serve less profitable. If, of course, you're Sean O'Grady.
Gender Balance Ban Be Bad For Profits [Independent Minds]