Women board members increase businesses' profits tenfold, report finds
"Pull the other one" was my immediate old-fashioned reaction to seeing this claim. It appears to emanate from this document
The document concerned, however, is primitive from an academic POV. It has lots of pretty grapics but no details of its methodology: no definitions of the terms it uses, no breakdown into categories of economic activity, no breakdown into the recency or otherwise of the company and no breakdown into whether it served a poor, rich or medium clintele. It appears in fact to have no controls at all. I would very much like to see the raw data. I am sure that the influence of feminist management would be much reduced if all other plausibly relevant factors were taken into account.
Just off the top of my head, let me suggest that firms selling cosmetics are exceptionally profitable. The prices charged for some such products would certainly suggest large profit margins. Women as a whole are very gullible about products that allegedly increase their beauty. And beauty-promoting firms would undoubtely have a strong female presence in their management. So such female-led companies were not highly profitable because they were led by women. They were exceptionally profitable because they were operating in an exceptionally profitable business sector
The method of analysis is important too. Are we looking, for example, at extreme quintiles? This is a lamentably common practice elsewhere and normally means that there is no overall relationship in the data as a whole.
So much more information is needed before these findings can be accepted
Companies with greater numbers of female board members bring in 10 times greater profits, a study has revealed.
The research found that executive committees composed of more than a third of women have a net profit margin of 15.2 per cent, while those with none make just 1.5.
The ‘Women Count 2020’ report claims that this performance gap is costing the UK economy a potential £47 billion of pre-tax profit.
Lorna Fitzsimons, co-founder of The Pipeline, which commissioned the report, said the difference is driven by the fact that companies that are more representative have a "better understanding of clients and customer need”.
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