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Company Stock Prices Fall When Women Are Added To Boards Of Directors
Turns out that many companies who seek to embrace equality by any means could actually be doing their shareholders a disservice. But hey, we thought equality of outcome was a guaranteed fast track to utopia! What happened?
In fact, many companies experience stock price declines when women are added to the board of directors, Bloomberg points out.
An analysis of 14 years of market returns across almost 1,900 companies recently revealed that when companies appoint female directors, they experienced two years of stock declines. Companies saw their stock fall by an average of 2.3% just from adding one additional woman to their board.
Kaisa Snellman, an assistant professor of organizational behavior at INSEAD business school and a co-author of the study said: "Shareholders penalize these companies, despite the fact that increased gender diversity doesn't have a material effect on a company's return on assets. Nothing happens to the actual value of the companies. It's just the perceptions that change."
The study suggests that investor biases are to blame. The study asked senior managers with MBAs to read fictional press releases announcing new board members. The statements were identical, but for the gender of the incoming director.Participants said that men were more likely to care about profits and less about social values, while women were deemed to be "softer".
Snellman continued: "If anyone is biased, it is the market. Investors should consider organizations that add women and other under-represented groups to their boards because there's a good chance that company is being undervalued."
Despite this study's findings, other non-academic reports over the years have suggested that diverse leadership results in corporate success. A McKinsey analysis concluded that board diversity correlates with positive financial performance and a 2019 Credit Suisse report noted a "performance premium for board diversity".
These findings have prompted investors like BlackRock to push for diversity on boards. Women now account for more than 25% of board members on the S&P 500 and 20% of boards globally.
(Score: 5, Insightful) by idiot_king on Thursday November 28 2019, @05:10PM (31 children)
The """""market""""" values what its controllers tell it to value. This is why sexism is demonstrable from a systemic level and is systematically prevalent throughout societies. Women earn less than men because people in a capitalist society value capital more than human life. The reason for the gender pay gap is that money itself is used as a latent way to disparage and devalue implicitly from a societal standpoint; this also is why slaves aren't paid, because they have no societal value, and this is shown in a display of power by depriving them of capital, i.e., value-in-itself in a capitalist society. By forcing the bad actors and devaluers of life itself out of control, those who are "lower" on the societal totem pole can finally receive implicit recompense for the literal and figurative devaluation of their dignity as human beings in themselves. This is the reason for socialist policies and eventual communism; but first humans need to stop playing power games with dollars and cents, because it's incredibly petty to commoditize and then put a definite price on a person's life because of their race, gender, disability, etc.
Long story short, humans need to grow the f*ck up and stop thinking that money (capital) is how to value everything, when it in fact destroys everything, destroys life itself by giving bad actors a tool that forces the illusion that material worth is more valuable than certain, specific human lives.
(Score: 3, Insightful) by Bot on Thursday November 28 2019, @05:30PM
>grow the f*ck up and stop thinking that money (capital) is how to value everything
this hasn't been the case until after the industrial revolution and its ideologies, red/black socialism. "Capital", redistribution, property. Opposed to the one dimensional society, or a mere component of it?
Account abandoned.
(Score: 5, Informative) by Anonymous Coward on Thursday November 28 2019, @08:33PM (13 children)
The beauty of markets is that they're not driven by what they're told, but by self interest. You see apples on the market selling for $10/piece. You know you can grow apples for cheaper. And so you do. You start producing tons of apples and selling them for $2 per piece. The price of apples plummets, you get rich, the market is closer to its "true" value. The "true" value being the cheapest value possible that an apple can be sold for while still providing a profit to its seller.
The price of an apple has nothing to do with what 'the market's controllers tell it to value' - it has everything to do with how cheap you can produce an apple and sell it! Same thing for wages and other aspects of the market. That's the exact reason slavery was so difficult to set aside. Company A is using slaves for labor. Company B isn't. Company A is going to have vastly higher profit margins and be able to grow faster, sell their product cheaper, and just generally crush Company B. Companies using slaves grow and prosper, companies not using slaves wither and die.
Imagine there was any meaningful wage gap. Take the above paragraph and simply replace "slave" with "women" and you get the exact same thing. This wouldn't be a matter of perception or opinion but economic performance. Girly Company A can produce their products for $1000 while Sausage Fest Company B has to charge $1100 for the exact same stuff. Girly company is going to grow, expand, and dominate the competition. Exactly as companies using slaves did. Except we don't see that, at all. And that's because the "wage gap" is a myth. Once you actually normalize for experience, ability, hours worked, etc it completely disappears. The original myth, popularized by Clinton, simply compared the median full-time earnings of women and men. That's where you get the '77 cents on the dollar' number from. It didn't even normalize for hours worked (men work more hours), or even the the same jobs. Calling it a myth is overly polite. It was a lie to drive social anger for the sake of political gain.
(Score: 1, Insightful) by Anonymous Coward on Thursday November 28 2019, @09:10PM
Sure, go ahead and grow some apples, self publish your album or indie code your killer app.
There are reasons startups only exist to get bought out and every artist sells their soul. Whales exist and fuck with the market. The average citizen has a pitiful disposable capital, most of their wealth is goods they use personally such as their car, home (if they're lucky) and electronics.
(Score: 5, Interesting) by PartTimeZombie on Thursday November 28 2019, @09:15PM (4 children)
True. Which is why when you start selling apples for $2, undercutting my $10 apple operation I am going to offer you $10 million to sell me your apple company so that I can continue to own the apple market.
Your point about slaves leaves out the part where you have the expense of feeding, clothing and housing your slaves, when I don't.
I did a quick search on the term "Was slavery economically efficient" and while there is some debate, it seems the general consensus is "no".
Your point about the wage gap is something I would largely agree with though. The company I work for would employ zero men if they could pay women 77 cents on the dollar and get away with it, but they don't.
(Score: 2) by Mer on Thursday November 28 2019, @10:28PM (2 children)
Wait, why wouldn't slavery be economically efficient? You have full time employees, you have to pay them a living wage, whether or not the standards of living their wage can afford is acceptable is another debate but they must afford rent, food and taxes. Without even considering the fact that you can squeeze more hours of a slave than you can out of an employee and that you don't need to spend extra on a slave for recreation after their living needs are fulfilled, you'd be saving because your slaves could be lodged near their place of work in communal housing and eat communal meals.
I'm pretty certain that if slavery is inefficient it's because of the application, not because slavery is inherently a bad idea from the point of view of pure economical efficiency.
And yes, as I write this I realise how much this sounds similar to "true communism has never been tried"
Shut up!, he explained.
(Score: 2) by PartTimeZombie on Thursday November 28 2019, @11:52PM
This is a place to start. [fee.org] The short answer is: It's complicated.
(Score: 3, Informative) by dry on Friday November 29 2019, @03:44AM
You have to invest in slaves generally, there are exceptions such as during a war. when you can capture new slaves to replace the ones you worked to death. Generally though, you have to look after your slaves from birth to death, train them, guard them (both from thieves and the slaves running away), look after them when sick etc. With employees, the government or workers family is responsible for most of that, you hire them already trained, use them up and get rid of them.
(Score: 1, Interesting) by Anonymous Coward on Friday November 29 2019, @06:54AM
I completely agree with you, but I don't think slavery is an exception - but rather quite vivid evidence of this phenomena! There have been abolition movements for thousands of years. Aristotle reference such movements some 2,300 years ago. And throughout the centuries various cultures have banned slavery only for it to gradually eek back into society. What happened that finally made it take hold?
This [ourworldindata.org] graph explains it all and is one aspect most analysts fail to properly consider. For most of our species nearly everybody worked in agriculture. Then around 1800 there started to be a sharp change. That change was the industrial revolution which brought two critical changes: Skyrocketing efficiencies in production efficiency and rapid migration to cities. Cities became sources of cheap, temporary, disposable labor that was far more efficient than slaves. When your slave starts performing poorly? You are under an immense obligation to "fix" that, one way or the other. When your worker starts performing poorly? You could fire him and replace him before the day was out.
In the time of widespread agriculture this was not possible. Distances between plots were far, transportation was slow, population densities were low, and production was highly inefficient. Under these conditions slaves were extremely efficient because even if paid labor would have been more efficient - it simply did not exist on the scale and readiness needed. And this was, again, also happening at the same time that ever large plots could be maintained by ever smaller numbers of individuals due to productivity gains. These changes were happening at an exponential rate by the mid 1800s. Lincoln killed slavery because he could, and the reason he could is because of economics.
Getting back to Aristotle [mit.edu], it's somewhat interesting that his wisdom drove him to prediction of precisely what happened, though he no doubt felt he was engaging in little more than a rhetorical hypothetical:
(Score: 1, Troll) by Thexalon on Friday November 29 2019, @12:25AM (1 child)
And that's why advertising and public relations don't exist.
Nonsense. For example, pay for engineers (a male-dominated profession) is substantially higher than the pay for teachers (a female-dominated profession), even though both professions generally require a master's degree and long hours (yes, even factoring in summer vacations for teachers). There are many top-quality teachers earning less than mediocre engineers.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 1, Insightful) by Anonymous Coward on Friday November 29 2019, @06:16PM
Wow. You're probably just about the dumbest person on this site. Does _every_last_reason_ have to be listed? Did you not consider "need" or "desireability of profession"? You're comparing the earnings of engineers and TEACHERS and suggesting women are underpaid compared to men?!?
This is a prime example of a straw-person argument.
(Score: 2) by FatPhil on Friday November 29 2019, @02:15AM (4 children)
The "true" value being the cheapest value possible that an apple can be sold for while still providing a profit to its seller.
The price of an apple has nothing to do with what 'the market's controllers tell it to value' - it has everything to do with how cheap you can produce an apple and sell it!
"""
Why do I need to debunk this trope every time there's a story about 'markets'? The above is a pure fiction unsupportable by neither mathematical theory (read some Patero, you're a few hundred years behind the times), nor practice (not that a well-functioning market is easily found).
It is just as true (and equally, just as false) to say that in a well functioning market, the price of a good or service will be maximised, as there's no asymmetry between the resources being exchanged.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by aristarchus on Friday November 29 2019, @07:29AM (3 children)
FTFY, no thanks necessary.
(Score: 2) by FatPhil on Friday November 29 2019, @12:07PM (2 children)
I did notice it after posting, but couldn't be arsed to follow up to myself as anyone whose only comeback is a typo snark has nothing of value to contribute, and I don't mind them outing themselves as such.
Expect typos in this too - this shitty PC keyboard has a habit of dropping 2 or 3 consecutive characters, and having unpredictable rollover behaviour.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by aristarchus on Friday November 29 2019, @08:03PM (1 child)
Good, Phil! I was worried about you.
(Score: 2) by FatPhil on Saturday November 30 2019, @08:41AM
Know any cures for insomnia?
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 3, Insightful) by corey on Thursday November 28 2019, @08:36PM (5 children)
Well written.
These two sentences have a real sexist sarcastic tone to them. I don't know if it came from the submitter or article but it's not cool.
It could also be due to most investors being middle aged white blokes who inherently think women can't lead as well.
(Score: 3, Interesting) by barbara hudson on Thursday November 28 2019, @09:02PM (4 children)
Actually, the whole article shows what we've always known to be true - the stock market is irrational. In a rational market, if the performance doesn't change, the value shouldn't either.
The lesson is - buy stock in companies headed by women. The company is undervalued versus the underlying performance. She'll move on, a guy will take her place, the stock will jump, sell - PROFIT.
Exceptions: Carly Fiorina, Hillary Clinton.
SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
(Score: 4, Insightful) by Ethanol-fueled on Thursday November 28 2019, @09:32PM (3 children)
All companies large enough to have boards are all ridiculously overvalued, and don't forget that stock and other imaginary incantations that others think is money need a serious correction.
As much as I don't regret voting for Trump, everytime I hear "how well the economy's doing" I know it's complete bullshit because the stock market is all imaginary overvalued shit completely twisted and arbitrarily manipulated with voodoo-tier science (and this is not only a Trump lie, we got a lot of that from Obama and quite possibly every other damn president).
The economy is "doing well" when people (especially educated people) can live a middle-class lifestyle and own their own property and retire at age 65. That's when the economy is "doing well."
(Score: 3, Touché) by barbara hudson on Friday November 29 2019, @12:30AM (1 child)
The economy IS doing well. The 99% don't count, since the "new economy" means trading bits of data that represent pieces of paper that represent ownership in something that owns something else that owns something else.
We don't count.
SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
(Score: 3, Funny) by NickM on Friday November 29 2019, @02:05AM
I a master of typographic, grammatical and miscellaneous errors !
(Score: 2) by FatPhil on Friday November 29 2019, @02:30AM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2, Troll) by qzm on Thursday November 28 2019, @08:51PM (9 children)
The reason for the 'gender pay gap' is careful manipulation of statistics.
As soon as you normalize for obvious factors, you find that in the large majority of carriers women get paid on average more.
You must adjust for such things as experience and qualification in the job, hours worked, time spent in that role - all the NORMAL things you would expect to affect the income.
Of course that doesn't fit the required outcome, so they adjust for none of that, and since women on average work for less time in a given role (both in yearly hours, and in number of years), they tend to be paid less in total.
And there are two major factors that cause this.
One is that women tend to have children and by choice or pressure end up being primary care givers.
the other is that women HAVE MORE CHOICE. Men are looked down on if they are not working a lot and trying to grow a career. Women? not so much.
Its not hard of course to find anecdotal, or even industry areas where women are both under represented, and probably poorly treated.
Its also not hard to find such areas for men...
As to socialism and communism, those are simply a massive power grab by a small set of sociopaths who wish to impose their will on others.
This is clearly demonstrated by example.
Communisms primary social effect has been shown to be massive (usually intentional) deaths, and a terrible quality of life for 99% of the population.
As to communism and equality, only someone with zero experience of communist societies and history would do anything by laugh sadly at such a thought.
Oh, and lastly, you obviously have no idea of what money actually is. By definition money is used to 'value' (many) things, BECAUSE THATS ITS DAMN PURPOSE. It is a token of value, thats why it was created, thats why it is needed. Nothing about money forces any view of human lives value, or enabled your mystical bogeymen to do bad things. Lavrenity Beria didnt need money, nor did Pol Pot, money wasnt require for the Chinese 'Cultrual Revolution' purges. Stalin didnt need money to starve millions in the Holodomor.
I would suggest that you are the one who needs to grow the f*ck up, seriously.
(Score: 2) by barbara hudson on Thursday November 28 2019, @09:11PM (7 children)
Then how do you explain the pay gap for women who never have children? Same number of years of experience. Same career objectives as men, so your theory is just more patriarchal bs.
But that's okay. Men are becoming superfluous to the economy. For years, 3 women have graduated for every 2 men. Traditional male jobs are the ones in danger of disappearing (those 8 million driving jobs will be mostly gone in 15 years). Birthrate is declining, which means less need for new housing, so fewer construction jobs. The average half-life of a software developer continues to trend down, so you'd better have a second career lined up that will see you through your 40s and beyond, because there are not enough management jobs for old coders.
SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
(Score: 0) by Anonymous Coward on Thursday November 28 2019, @10:49PM (6 children)
Women, even childless ones, on average work fewer hours than men in similar situations.
You're going to need to provide some references if you want to make headway, because every explanation of the cause of the "gender pay gap" has pinned the turning point as "motherhood", and that, pre-motherhood, women are paid 1-2% more than men at the same level and for the same amount of work.
(Score: 2) by barbara hudson on Friday November 29 2019, @12:25AM (4 children)
"every explanation" is just that - an explanation without providing any hard data, because "everyone knows."
Also, hours worked has nothing to do with productivity. Why not re-read the latest study that shows a 4-day work week with 5 days pay makes people more productive. https://www.cbsnews.com/news/microsoft-tried-4-day-work-week-productivity-soared/. [cbsnews.com]
The problem women encounter is the "second shift", where even if the guy is unemployed, she's still expected to do the housework. It's called the "second shift", and that 2 hours of extra work every day adds up.
Women are fed up, and realizing that the cultural expectations of needing a man in our lives is bullshit [theguardian.com]
It's almost like men are emotional parasites who suck the health out of women for their own benefit - and there's some truth to that. Men still assume that they can retire from work, but women cannot retire from housework. This is part of the "second shift" problem, and one reason women are staying single.
It helps explain the continually falling birthrate in a previous story.
SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
(Score: 0) by Anonymous Coward on Friday November 29 2019, @01:40AM (3 children)
“Broke men are hurting women’s marriage prospects,”
...
"1- it's a million times better to be single than have a husband who is trash"
Because if a male isn't rich then he's trash?
(Score: 2) by barbara hudson on Friday November 29 2019, @07:50PM (2 children)
People (of any combination of sexes) can live together without the legal complications marriage brings. But now that women are often earning more than men, they're just employing the same calculus men have been using for generations. "Why buy the bull when you can get the sex for free?"
There's a difference between earning their keep and being rich. But there's not much attractive today in families where you need two incomes to survive, in a broke guy whose best hope is to drive an Uber until that job disappears from automation.
Same as guys wanting women 20 years younger than them. Women can do the math - the guy will be needing to have his diapers changed while she's still got plenty of years ahead of her. It's a bad deal all around for the woman.
A guy is 30 - his ideal woman is 20. A guy is 50 - his ideal woman is 20. A guy is 70 - he still wants a "babe". There's something wrong here, and it's not the women.
SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
(Score: 0) by Anonymous Coward on Saturday November 30 2019, @04:44AM (1 child)
There's nothing wrong here. You're projecting your ideal world onto the real one. That never works. Of course males are after the most capable females (best breeding) and females are after the most capable males (highly paid thus more secure in theory). Your double standard of it's okay for women to have their preferences but men's preferences are wrong is bullshit.
And where did you ladies ever get the idea that you won't be dying alone? Men don't live as long as women.
(Score: 2) by barbara hudson on Saturday November 30 2019, @07:36PM
Gross misinterpretation of what I wrote. Men are free to have their preferences, and now women are smartening up and setting criteria that suit us more. No more need to "date downward" to get a guy because more and more, marriage is obsolete. Dead. Not even pining for the fjords.
Each individual is free to act in their own best self-interest. If you have a problem with that, and that it doesn't meet the male goal of having a woman much younger than him, tough shit. Either start accepting that you'll have to consider older women as well, or stay single. Your call.
Never said women wouldn't be dying alone. Just that there's absolutely no point in observing the "man must be older than woman" convention. It harms women by leaving them alone for decades. Screw that.
Mathematically, for there to be an even chance of either party predeceasing the other, women should be 4 years older than men (YMMV depending on country). Are you going to say that's not fair?
SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
(Score: 0) by Anonymous Coward on Friday November 29 2019, @06:00AM
"Women, even childless ones, on average work fewer hours than men in similar situations."
[citation needed]
(Score: 2) by c0lo on Thursday November 28 2019, @11:17PM
And it's wrong, because it's reductionist. You'll need more kind of money that are not interchangeable to quantify sustainability on long term - e.g. the market value of the minerals extracted in an area does not quantify the loss of soil/water/ecology on the mine site.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford