
Stocks Perform Better if Women Are on Company Boards - roguecoder
http://www.bloomberg.com/news/2012-07-31/women-as-directors-beat-men-only-boards-in-company-stock-return.html
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Uchikoma
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)

~~~
chroma
_(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.

~~~
Uchikoma
While it's not clear if this is gender specific or culture.

~~~
slurgfest
To be the devil's advocate (I do NOT seriously defend sexism) why does the
cause matter if you are looking for the best person? If women are almost
always better potters in Norway, and you must make pots in Norway, then it
makes sense that you would hire a lot of women.

------
Zenst
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.

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dinkumthinkum
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
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
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
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
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".

~~~
einhverfr
If the Innuit doesn't know anything about the business, then there is a
different issue.

If the business is drilling for oil in the Arctic, I think the average Innuit
would have something important to say, though.

But how many average anything do you see on boards of directors, I wonder.

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p_sherman
Correlation vs. Causation. Good day.

------
Tichy
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.

------
obilgic
what about companies with no men on board?

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

------
ChrisNorstrom
" _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-
wal...](http://www.businessweek.com/articles/2012-05-31/managing-wall-streets-
winner-effect)) 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.

~~~
cremnob
Where did the "women are less risky" thing come from? The Bundesbank published
a paper about women bankers being riskier.

[http://www.ft.com/intl/cms/s/0/cd4a3ac0-77f6-11e1-b437-00144...](http://www.ft.com/intl/cms/s/0/cd4a3ac0-77f6-11e1-b437-00144feab49a.html)

~~~
slurgfest
I can't speak to the application in business. It's a well established idea in
biology.

Females invest more biologically in eggs and pregnancy. Men may have many more
children than women but also have greater risk of having none. Similar
patterns show up in lots of areas. At human conception there are significantly
more males than females, at birth they are close to 50/50 - males are more
fragile. Even after that point, on average, men take more risks, die earlier
and are more likely to be murdered.

So again, I don't have expertise to know what any of this has to do with who
should run a company, the correlation may be extremely dodgy; but men are at a
biological level riskier critters than women.

~~~
kolinko
Any scientific research to support that?

Just because you can put a nice story behind a theory doesn't make it true.

~~~
einhverfr
Some if it ties in with this:

<http://www.medicalnewstoday.com/articles/105013.php> at least regarding sex
at conception. I am not entirely sure about whether we really have hard direct
data regarding sex at conception but that's one possibility regarding that
data. On the other hand, it's possible that there are biological differences
between sperm carrying X and Y chromosomes and that these might be selected
for one way or another.

However, trans-historically (closer to my field of expertise) it is generally
true that men take on riskier endeavors than women do, and that women follow
as areas develop. Frontiers generally tend to be nearly exclusively male (at
one point the Wild West had a gender ratio of 50 men per woman, and this is
not isolated. Consider the early classical practice of having the men march
off in search of fortune, for example.

The thing to keep in mind here is that women have a narrower window of
opportunity to start a family than men do. If you are 40 and male, and you are
not married, you could still get married to a younger woman and have kids, but
if you are 40 and female, you are less likely to be able to have kids.
Therefore men can generally better afford to move into immature markets and
riskier endeavors than women can.

~~~
kolinko
Well, I think the question is not whether an average woman is more or less
risky than an average man, but whether an average woman banker/manager is more
or less risky than an average man on that position.

Think of that one woman per 50 man on the Wild West. How tolerant to risk must
she have been to go to a dangerous land populated mostly by men. All of her
family must've told her to stay home, and she had no role models to follow.

Also, you mentioned that in biology it's well established that women are
(inherently?) less adventurous than man. You've got research which talks about
sex at conception, but I was asking about a research which proves that any
such relation persists beyond conception and is not a result of sociological
effects (because we're talking biology here).

~~~
einhverfr
Well, I wasn't the one who brought up biology and in fact in my brief mention
suggested there were some questions.

The larger issue is trans-historicly men tend to be, well, pioneers, and women
tend to follow and build civilization. To the extent that there is a
biological inherent risk aspect, it is because of differences in timeframes to
establish a family. Men and women are different in this regard biologically.
Men can have kids when relatively old while women cannot.

For this reason if you expect someone to take risks while young, this favors
men over women, particularly if the risk is that one might not be as
established by the time one is, say, 30 years old. It is different, for
example, to require an extensive post-doc program followed by a lengthy tenure
track in order to get a coveted academic position if you are a man and can
delay getting married and having kids than if you are a woman.

