Kulturkampf

[Potato]

https://www.afr.com/work-and-careers/leaders/female-directors-add-no-financial-value-study-20240505-p5fp0d

A study by the Australian National University has found that the gender of directors appointed to company boards had no impact on the financial performance of those businesses.

The authors of the report, Nicholas Bayly, Robert Breunig and Chris Wokker from ANU’s Crawford School of Public Policy, analysed the relationship between female directors and the financial and share price performance of 1,721 directors at 2,483 firms between 2000 and 2016.

The research looked at financial performance using five different measures including return on assets; return on equity; and Tobin’s Q (the market value of a company divided by the cost of replacing its assets) and found statistically insignificant results for the vast majority of measures.

“Taken together, the evidence is very strong the gender of board appointees does not impact firm financial performance,” the research paper concludes.

Professor Breunig said the results should be seen as a positive for gender advocates because they showed no negative consequence of appointing female directors. Almost 20,000 male non-executive directors were appointed in the reference period.

But gender advocates including chairman of the 30% Club, Nicola Wakefield Evans, have disputed the findings, underlining the data only examines up until 2016 at which point there was a substantial increase in the representation of females on boards.

One possibility is that board members have no effect on firm performance, whether male or female, they said.

Another possibility is that boards have an effect on firm performance but there is no differential impact of female board members.

The researchers said that more gender-diverse boards could bring other benefits including improved staff happiness and wellbeing.

If board positions have no impact on firm financial performance, and these are controlled by ‘old boy networks’ then breaking them up with targets and quotas could also be welfare-enhancing, the authors conclude.