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posted by janrinok on Thursday November 28 2019, @04:31PM   Printer-friendly
from the shortsighted dept.

Submitted via IRC for Runaway1956

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.


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  • (Score: 2, Interesting) by RandomFactor on Thursday November 28 2019, @06:50PM (7 children)

    by RandomFactor (3682) Subscriber Badge on Thursday November 28 2019, @06:50PM (#925729) Journal

    Conversely. one of the advantages Western civilization has over Middle Eastern is that we approach twice the productive capacity per unit population.

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  • (Score: 4, Touché) by barbara hudson on Thursday November 28 2019, @09:13PM (6 children)

    by barbara hudson (6443) <barbara.Jane.hudson@icloud.com> on Thursday November 28 2019, @09:13PM (#925770) Journal
    So half as many jobs available. Got it. Because distributing the work via a shorter work week would be socialist.
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    • (Score: 2, Disagree) by khallow on Thursday November 28 2019, @11:34PM

      by khallow (3766) Subscriber Badge on Thursday November 28 2019, @11:34PM (#925801) Journal

      Because distributing the work via a shorter work week would be socialist.

      It'd be stupid, particularly with all the overhead costs that such a society would add per job. Better to just let the employers find additional valuable stuff to do.

    • (Score: 1) by RandomFactor on Friday November 29 2019, @04:16AM (4 children)

      by RandomFactor (3682) Subscriber Badge on Friday November 29 2019, @04:16AM (#925921) Journal

      The economy is not a static pie. As you add producers and consumers it adjusts accordingly.

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      • (Score: 2) by barbara hudson on Friday November 29 2019, @07:34PM (3 children)

        by barbara hudson (6443) <barbara.Jane.hudson@icloud.com> on Friday November 29 2019, @07:34PM (#926113) Journal

        And as resources become more limited and unusable due to pollution and war, the economy contracts. Same with an aging population. The economy contracts. Same with bubbles collapsing. The economy collapses.

        Just look at WeWork. Uber. Anything to do with the gig economy. It's designed to get a few people running a platform rich while impoverishing the many. The US sold off huge chunks of manufacturing to the Chinese (think steel as one example) to bet on the "New Economy." That led to the real estate bubble, which impoverished millions, and China's dominance in manufacturing.

        And now everyone is looking to shed jobs via automation and AI. We already have robots servicing robots, so jobs servicing those robots aren't a viable long-term solution. Neither are jobs programming robots - it takes the same number of people to write the software for on robot as for a million doing the same job.

        Even fruit-picking jobs are being automated. Same as driving the tractor on the farm. Milking cows? The cows are being trained to go through an automated milking machine several times a day, where they are also checked by AI for diseases.

        We've already seen the first automated truck deliveries on public roads. We've had warehouses for decades where there are no lights during normal operations because there are no humans needed. We have fully automated mines - the minerals are dug up, loaded onto trains, and the trains drive away and are unloaded at their destination, and all automated. Even the trains.

        We've had jobless recoveries in the past - but this time will be REALLY different.

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        • (Score: 1) by RandomFactor on Saturday November 30 2019, @03:07AM (2 children)

          by RandomFactor (3682) Subscriber Badge on Saturday November 30 2019, @03:07AM (#926252) Journal

          And as resources become more limited and unusable due to pollution and war, the economy contracts. Same with an aging population. The economy contracts. Same with bubbles collapsing. The economy collapses.

          There are positive and negative factors that affect the economy. But...all of that was just as true before women entered the workforce.

          Just look at WeWork. Uber. Anything to do with the gig economy. It's designed to get a few people running a platform rich while impoverishing the many. The US sold off huge chunks of manufacturing to the Chinese (think steel as one example) to bet on the "New Economy." That led to the real estate bubble, which impoverished millions, and China's dominance in manufacturing.

          OK, China has been engaged in economic warfare, dumping, and currency manipulation and our manufacturing base has suffered greatly as a result - that makes the US economy weaker generally.
           
          But...how does this relate to the fact that with a larger percentage of the population in the workforce we punch above our weight economically vs. economies where the culture excludes them?

          And now everyone is looking to shed jobs via automation and AI. We already have robots servicing robots, so jobs servicing those robots aren't a viable long-term solution. Neither are jobs programming robots - it takes the same number of people to write the software for on robot as for a million doing the same job.

          Even fruit-picking jobs are being automated. Same as driving the tractor on the farm. Milking cows? The cows are being trained to go through an automated milking machine several times a day, where they are also checked by AI for diseases.

          We've already seen the first automated truck deliveries on public roads. We've had warehouses for decades where there are no lights during normal operations because there are no humans needed. We have fully automated mines - the minerals are dug up, loaded onto trains, and the trains drive away and are unloaded at their destination, and all automated. Even the trains.

          I agree that jobs change over time and automation eliminates them. This seems equally applicable in either case.

          We've had jobless recoveries in the past - but this time will be REALLY different.

          If you keep half the population out of the economy, it will just shrink and you will still have automation, outsourcing, dumping, foreign investors, recessions, lost jobs, and recoveries.

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          • (Score: 3, Informative) by barbara hudson on Saturday November 30 2019, @03:28AM (1 child)

            by barbara hudson (6443) <barbara.Jane.hudson@icloud.com> on Saturday November 30 2019, @03:28AM (#926260) Journal

            The United States engaged in economic warfare from its inception , including not respecting intellectual property rights. As for jobs, you have two choices - spread what work is left among those who want to work, or pay those who want to work to find other things to do.

            As for dumping, the United States has been dumping agricultural products on international markets for ages. Farm subsidies, for example. And plenty of non-tariff barriers.

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            • (Score: 1) by RandomFactor on Saturday November 30 2019, @03:07PM

              by RandomFactor (3682) Subscriber Badge on Saturday November 30 2019, @03:07PM (#926398) Journal

              That perplexed feeling you get when you restate someone's own assertion and they attack it.
               
              - Doesn't actually refute your position that China is engaged in economic warfare.
              - Overvalues the early US's position - the US was not that special on the world stage until a series of wars in the first half of the 20th century, that it did not start, served to jump it into a dramatically stronger position.
              - Not related to discussion
               
              Reminder - this is the premise under discussion:

              Conversely. one of the advantages Western civilization has over Middle Eastern is that we approach twice the productive capacity per unit population.

              This is an econo-cultural premise that assumes having women in the workforce provides advantages over economies that do not. I'm certainly interested in how this statement is incorrect. What you are providing are variations on political talking points 'USA bad', 'capitalism bad','socialism good','pollution bad', 'automation bad.' True or not, those don't matter since they don't actually support or contradict the premise.
               
              If the premise is actually incorrect/weak/overstated/etc. somehow, I would be interested in hearing how and why.

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