Women on the Board reduces profits

[DanishDynamite]

Just read this (http://politiken.dk/erhverv/article340838.ece) article (in Danish) which tells the result of a paper by Renee Adams from the University of Queensland. According to the article, one result of this (statistical) research was that in an investigation of 1,939 medium to large companies in the US, the more women on the board, the more negative the profit numbers.

Thoughts?

[Darth Rotor]

Just read this (http://politiken.dk/erhverv/article340838.ece) article (in Danish) which tells the result of a paper by Renee Adams from the University of Queensland. According to the article, one result of this (statistical) research was that in an investigation of 1,939 medium to large companies in the US, the more women on the board, the more negative the profit numbers.

Thoughts?
Simple.

Go to the closets.

Count the fancy shoes.

There's the liquidity leak.

:duck:

The JREF ladies are soooo gonna flame me for that! :jaw-dropp Maybe I should just dial 911 now. :eye-poppi

DR

[skeptifem]

how many companies did they look at in the study?


ebay's president and ceo is a woman... thats the first thing i thought of for some reason.

[Darth Rotor]

how many companies did they look at in the study?


ebay's president and ceo is a woman... thats the first thing i thought of for some reason.

In the OP, DD cited

1,939 medium to large companies in the US

DR

[skeptifem]

*smacks forehead* how could i miss that? ugh. sorry.

[Darth Rotor]

*smacks forehead* how could i miss that? ugh. sorry.

Perhaps you were distracted by your lovely new pair of shoes. :D

:duck:

DR

[Miss Anthrope]

Perhaps you were distracted by your lovely new pair of shoes. :D

:duck:

DR

Now, let's get serious about the data. The article fails to....


.........oooh...........

........something shiny..........


Where was I?

[MelBrooksfan]

Now, let's get serious about the data. The article fails to....


.........oooh...........

........something shiny..........


Where was I?

Shoes.

[DanishDynamite]

Sorry.

I wondered if there were any relevant thoughts?

[WildCat]

Sorry.

I wondered if there were any relevant thoughts?
Boards don't run the companies, they oversee them. I fail to see how the makeup of the board can significantly affect the profitability of the company. The CEO and upper management are much more involved than the board is.

I'd bet many board members don't have the slightest idea what the company whose board they sit on really does on a day-to-day basis.

[tkingdoll]

Without an English translation of the article, it's almost impossible to comment on. We don't have enough information. It could simply be a meaningless correlation. Or there could be something about the poor-performing companies not present in the others. Did the study just look at gender at board level, or other factors? Over what period was each company unprofitable? Did the decline in profits begin after the appointment of the woman? Were the qualifications and experience of the women equivalent to that of their predecessors (assuming their predecessors had the company in profit)?

We all know that correlation does not equal causation, but assuming for a moment that this correlation is true, what are the reasons for it, and what should we infer? That women are not up to the job? That we shouldn't hire women for the top position? That all women in board positions should immediately be replaced by men? If a company is performing that badly, surely its shareholders would demand the heads of the top positions anyway?

[DanishDynamite]

Boards don't run the companies, they oversee them. I fail to see how the makeup of the board can significantly affect the profitability of the company.
See results above.
The CEO and upper management are much more involved than the board is.

I'd bet many board members don't have the slightest idea what the company whose board they sit on really does on a day-to-day basis.
Next question?

[tkingdoll]

Boards don't run the companies, they oversee them. I fail to see how the makeup of the board can significantly affect the profitability of the company. The CEO and upper management are much more involved than the board is.

I'd bet many board members don't have the slightest idea what the company whose board they sit on really does on a day-to-day basis.

I assumed he was talking about an Executive Management Board, rather than a board of shareholders.

If the latter, then you are quite right, they don't run the company. They do, however, put money into it. Could women shareholders simply be more cautious? (by which I mean, they are perhaps less likely to inject cash into an ailing business?).

There is probably some research somewhere on the risk-averseness of the genders.

[tkingdoll]

See results above.



You haven't posted anything but a correlation. That doesn't mean the presence of women on a board are affecting the profitability of the company.

[DanishDynamite]

Without an English translation of the article, it's almost impossible to comment on. We don't have enough information. It could simply be a meaningless correlation. Or there could be something about the poor-performing companies not present in the others. Did the study just look at gender at the CEO level, or other factors? Over what period was each company unprofitable? Did the decline in profits begin after the appointment of the woman? Were the qualifications and experience of the women CEO equivalent to that of their predecessor (assuming their predecessor had the company in profit)?
The specifics of the paper the article was based on, are given. Perhaps looking up the article itself and commenting it would be of greater interest?
We all know that correlation does not equal causation, but assuming for a moment that this correlation is true, what are the reasons for it, and what should we infer? That women are not up to the job? That we shouldn't hire women for the top position? That all women in CEO positions should immediately be replaced by men? If a company is performing that badly, surely its board of shareholders would demand the head of the CEO anyway?
Perhaps addressing the paper and its result would be better than speculating.

[tkingdoll]

The specifics of the paper the article was based on, are given. Perhaps looking up the article itself and commenting it would be of greater interest?

Perhaps addressing the paper and its result would be better than speculating.

Post a link in English then. Or, go find the paper and link to it. Otherwise, this entire thread is a waste of time.

Also, I edited my post to better reflect the claims of the OP. You may wish to edit your quote accordingly.

[DanishDynamite]

You haven't posted anything but a correlation. That doesn't mean the presence of women on a board are affecting the profitability of the company.
Indeed. I look forward to the "other" explanation.

[tkingdoll]

Indeed. I look forward to the "other" explanation.

We have no information to go on. You posted a link to an article in Danish. If you would care to post a link in English, or a link to the study itself, then someone might care enough to read it.

As it is, who gives a damn? Really.

[skeptifem]

Perhaps you were distracted by your lovely new pair of shoes. :D

:duck:

DR



:confused: I DONT GET IT LOL

thinking too much gives you wrinkles

[DanishDynamite]

We have no information to go on. You posted a link to an article in Danish. If you would care to post a link in English, or a link to the study itself, then someone might care enough to read it.
Blah, blah.

The article was in Danish. Not much I can do about that until an article about the same thing occurs in English.

I already told you the name of the author (a non-Dane) and where he stemmed from (Queensland).

Look up the paper yourself.
As it is, who gives a damn? Really.
If you don't give a damn, that is your choice. I've heard that ostriches do like to put their head in the sand.

[Mr. Skinny]

I worked with a Fortune 1000 company for about 5 years, so I'd consider it medium sized. The Board of Directors had little or nothing to do with day to day operations, but they did meet and vote on major expenditures.

I think at the time I had requested $250,000 USD to re-do the plant security alarms, and the BoD had to approve it. This was circa 1979.

My point is, perhaps the BoD do have influence on expenditures, at least in my experience they did.

[DanishDynamite]

I worked with a Fortune 1000 company for about 5 years, so I'd consider it medium sized. The Board of Directors had little or nothing to do with day to day operations, but they did meet and vote on major expenditures.

I think at the time I had requested $250,000 USD to re-do the plant security alarms, and the BoD had to approve it. This was circa 1979.

My point is, perhaps the BoD do have influence on expenditures, at least in my experience they did.
Any BoD which DID NOT have influence on expenditures must have been a first ever.

[Mr. Skinny]

Any BoD which DID NOT have influence on expenditures must have been a first ever.
Well, mine was just anecdotal evidence for major expeditures.

I'd like to see a bit more data before I damn women for making companies less profitable. For example, I'd like to know how long they've been on the board. Is it possible they've been on the board for a short time, but are more forward looking, and the expenditures haven't really turned a profit yet?

Or, are they just less risk-averse than their male counterparts?

[DanishDynamite]

Well, mine was just anecdotal evidence for major expeditures.

I'd like to see a bit more data before I damn women for making companies less profitable. For example, I'd like to know how long they've been on the board. Is it possible they've been on the board for a short time, but are more forward looking, and the expenditures haven't really turned a profit yet?

Or, are they just less risk-averse than their male counterparts?
Look for a paper by Renee Adams from the University of Queensland.

[Mr. Skinny]

Look for a paper by Renee Adams from the University of Queensland.
Googled and found this: http://www.business.uts.edu.au/finance/research/newsletters/April2007.pdf

Unfortunately, my slow connection doesn't want to seem to load it. Can you confirm this is the paper in English, DD?

[DanishDynamite]

Googled and found this: http://www.business.uts.edu.au/finance/research/newsletters/April2007.pdf

Unfortunately, my slow connection doesn't want to seem to load it. Can you confirm this is the paper in English, DD?
Nope. This page doesn't contain a paper. Sorry, Skinny God.

[WildCat]

I worked with a Fortune 1000 company for about 5 years, so I'd consider it medium sized. The Board of Directors had little or nothing to do with day to day operations, but they did meet and vote on major expenditures.

I think at the time I had requested $250,000 USD to re-do the plant security alarms, and the BoD had to approve it. This was circa 1979.

My point is, perhaps the BoD do have influence on expenditures, at least in my experience they did.
Well that's about all they really do, besides hire the CEO. Many BoD members are picked to add prestige to the company, and actually do very little. This was obviously the case of former Illinois governor James Thompson, who was a member of the Hollinger International board. During his testimony at the Conrad Black trial, it was obvious he didn't have the slightest clue as to anything going on at the company. The board would basically rubber-stamp any expenditure that came their way, Thompson came away from his testimony in quite a bad light.

It was enraged shareholders who forced out Conrad Black - because the board failed to do their jobs and do it themselves. Sadly, this is all too common in BoD's today IMHO. It's part of the reason CEO's make such obscene amounts of money, the BoD is often just a bunch of cronies who long ago forgot that their primary responsibility is to the shareholders, and not to the CEO or top management.

[LostAngeles]

Simple.

Go to the closets.

Count the fancy shoes.

There's the liquidity leak.

:duck:

The JREF ladies are soooo gonna flame me for that! :jaw-dropp Maybe I should just dial 911 now. :eye-poppi

DR

Darth, you make my liquidity leak. Wait, no. I had you confused with 6 pitchers of beer.

Indeed. I look forward to the "other" explanation.

Well, is there anything else of note among these companies aside from the precious life-giving tunnels underneath the Board's meeting tables where there should rightfully be shining sturdy staffs that guide the company through stormy storm storm s-words!

Sorry, I'm under the weather otherwise my alliteration would be better.

[PogoPedant]

The paper comes from a workshop and is named Gender diversity in the Boardroom (http://www.hertig.ethz.ch/LE_2006_files/Papers/Adams_Workshop.pdf). Now you can discuss the merits and demerits of the actual paper. Too early in the morning for me to read anything, though.

[tkingdoll]

I've heard that ostriches do like to put their head in the sand.

Oh, really? What highly successful company do you run?

[Meadmaker]

DD,
According to the article, large firms have more women on the board than small ones.

Also, different industries have different amounts of women on the boards.

Women are more likely to be found in large firms, in consumer oriented industries (like apparel, retail, etc. as opposed to oil drilling), and in risk averse firms (all this is from the article). These tend to be correlated with lower profit margins.

I suspect that these factors would explain the difference in profitability observed, but the authors didn't do the analysis.

[quixotecoyote]

Interestingly what that study was about was diversity on the board. The entire theoretical underpinnings of it was the concepts of differing groups needing additional mechanisms to compensate for the lack of natural trust generated by homogeneity. It moves specifically to incentive schemes to discuss that. I feel the title and tone of the thread up to this point has been misleading.

[boooeee]

The paper comes from a workshop and is named Gender diversity in the Boardroom (http://www.hertig.ethz.ch/LE_2006_files/Papers/Adams_Workshop.pdf). Now you can discuss the merits and demerits of the actual paper. Too early in the morning for me to read anything, though.

I'm not sure that is the paper being referred to. It is dated 2004. I ran DD's OP article through a machine translator. It appears that the paper hasn't been officially published yet. Gender issues in the corporate world appear to be Renee Adams specialty.

Here is the machine-translated version for your computer watchings:

Women on committee seats lose moneys in companies, new investigation from the US shows.
Of Nadia Claudi Send article Print article

The more women in the management, the more red figures on the bottom line.

The postulate must be seen like an unforeseen obstacle in the fight for fewer suits on the top posts. Nevertheless it's the result of a not yet published study among 1.939 medium size and big companies in the US.

Women are more responsible

That women on committee seats are a bad business, can paradoxically enough be due to the fact that they are more responsible than men. "Women on top posts are a minority and feel a bigger pressure in order to prove that they are capable enough. Therefore they are more hard in the felt than the men and intervene more in the manager's work. And we know that a management, who constantly feels seen over the shoulder, will finally be irritated and stop up with reporting back for the management. That consequently gives worser conditions for a co-operation", says Professor of Economics Renee Adams from University of Queensland, which doesn't think that the result of her investigation would have turned out otherwise, if it was the Scandinavian management rooms, which stood to accounts. In return women may be also a profit in the upper business blows, she points out. Suffers a management of bad management, and is marked the meeting room by empty chairs, it'll be able to be righted up, if the more active and responsible women take the posters - but consequently apparently only at the short track. Other assets "And then women have some other assets than men. They are more worried about their employees' well-being than their shareholders', and that may also have a meaning for the accounts. Thus they are maybe enough more hard than the men, but at the same time think more in human beings", thinks Renee Adams, who has done research into this difference between sexes among top leaders into Sweden. It isn't the first time that women have to be PCPheld responsible for the companies' bottom line. A study from 2005, enacted of among other things professor Nina Smith at the Business academy in Århus, however drew a more positive picture for among others the Danish women, who make up 7 percent of the committee seats in Denmark's 19 biggest works. No effect on earnings Companies with women in the management managed either significantly better than companies except women, or else had the sex no meaning for whether it was plus or minus in the accounts. The latter were shown once more in 2006. Here Nordisk Innovationscenter's report among the 500 biggest stock-exchange registered Scandinavian companies put multiplicity in managements of bodies zero, when it came to surpluses or deficits. Sex, races and nationality had no effect on a company's earnings. More backing finds the new investigation in Norway, where the managements opposite the Danishes are marked by quota system. The goal is that 40 percent of a management are to consist of women, but it has mostly been fruitful for the equal rights, professor Øyvind Bøhren from Handelshøyskolen in Norway thinks. His investigation shows that multiplicity doesn't benefit a company's value.

A question of change-over

"It isn't, because women are less competent than men. But managements, who have consisted of men through hundreds of year, saw, lead to it completely naturally difficulties and cooperational problems", have suddenly to adapt cooperational problems", Øyvind Bøhren estimates. A problem, which however will be solved over time, he thinks. "Quota system we can consequently not argue for judging from a financial perspective. It's a social project, which is about getting the equal rights into the managements as well as in the inhabitants. There I think that the bad figures on the bottom line are worth the price", he says.

Education and networks

In Denmark are fought also in order to get women on the committee seats. Not through compulsion and quotas, but through education and networks. Dansk Industri and Kvinfo have made the data base Women on boards over about 80 management-suitable women, and the first team on 19 women has just ended a new education at Business Institute under University of Aalborg. Through tools like the development of strategies and visions the 19 women have to be got the road to committee seats, and so far it has turned into 27 committee seats for the newly qualified ones. $. . It's visible-gørelse, which is to alter the picture at home, thinks lawyer Birte Dyrberg, who has started the education. "It isn't my experience that women damage the accounts. I do not think that we are worse rusted than men or intervene more in the management's work. Women maybe see more in wholes, but it's only one advantage that they think of both employees and shareholders", Birte Dyrberg says. More former have made the investigation ’Difference's it Matter’, thinks organisation Camilla Funck Ellehave, who have made the investigation ’Difference's it Matter’, thinks that the companies' accounts can be coloured red or black dependently of the management's chromosomes. "It, which discriminates the great in the real world, is that there is established some norms at the management rooms, which make it difficult to be other but a 50-year-old man with a touch of grey in the hair and financial background. The women maybe get not any permission to contribute with it, they can do", she thinks.

[Leif Roar]

Look for a paper by Renee Adams from the University of Queensland.

*cough*

"Ikke desto mindre er det resultatet af en endnu ikke offentliggjort undersøgelse blandt 1.939 mellemstore og store virksomheder i USA."

The paper hasn't been published yet, so it would be tricky to comment on it.

[PogoPedant]

I'm not sure that is the paper being referred to. It is dated 2004. I ran DD's OP article through a machine translator. It appears that the paper hasn't been officially published yet. Gender issues in the corporate world appear to be Renee Adams specialty.

Here is the machine-translated version for your computer watchings:

Ah, well to my defense I didn't actually read the opening post...

...

... not a very good defense, I suppose...

[Darth Rotor]

Darth, you make my liquidity leak.
Just think of me, when you get older, as your anti Depenz(TM). :cool:
Wait, no. I had you confused with 6 pitchers of beer.
An easy mistake to make, or a schnauzer.
Well, is there anything else of note among these companies aside from the precious life-giving tunnels underneath the Board's meeting tables where there should rightfully be shining sturdy staffs that guide the company through stormy storm storm s-words!
They make money.
Sorry, I'm under the weather otherwise my alliteration would be better.
Ah, the weather dominant position! How erotic, for someone who lives where it never rains. (In Southern California. A 70's tune)

DR

[geni]

I've heard that ostriches do like to put their head in the sand.

Pliny the Elder got that wrong.

[brodski]

I've heard that ostriches do like to put their head in the sand.

Which is a completly baseless myth.