Regular visitors to this blog will be aware that not even one academic study shows evidence of a positive causal link between ‘improving’ gender diversity on boards and enhanced corporate performance. We’ve asked dozens of organisations and hundreds of individuals to provide evidence of the ‘missing link’ and none has been provided.
On this blog we’ve provided links to three studies showing evidence of a negative causal link:
– Ahern / Dittmar
– Adams / Ferreira
– Deutsche Bundesbank
I’m indebted to Michael Klein of http://sciencefiles.org for directing me to a fourth study showing evidence of the negative link. It was carried out by two Norwegian academics, Professor Oyvind Bohren (Norwegian School of Management) and Professor R. Oystein Strom (Oslo University). Their report was published in 2010. We shall henceforth refer to it as the Bohren/Strom study. The paper’s full Abstract:
This paper analyzes the economic rationale for board regulation in place and for introducing new regulation in the future. We relate the value of the firm to the use of employee directors, board independence, directors with multiple seats, and to gender diversity. Our evidence shows that the firm creates more value for its owners when the board has no employee directors, when its directors have strong links to other boards, and when gender diversity is low. We find no relationship between firm performance and board independence. These characteristics of value-creating boards support neither popular opinion nor the current politics of corporate governance.
The full paper may be accessed here:
Now that’s what I call a good end to the week.