The question of whether companies with gender-diverse boards perform better than companies devoid of gender-diverse boards has been debated with passion for many years now. The locus of much of the early discourse was women on boards. However, the rhetoric has matured in recent times.
Whether motivated by political, social or cultural ideals, the weight of opinion amongst consultants and practicing board members now points to a positive correlation between various diversity attributes (sex, gender and ethnic identity, inter alia) and company performance. But is this a reliable reflection of reality? Wittgenstein's aphorism provides a useful reminder that all may not be exactly as it seems:
From its seeming to me—or to everyone—to be so, it doesn't follow that it is so.
Recently, Katherine Klein, a professor of management at The Wharton School, reviewed the findings of rigorous peer-reviewed studies and meta-analyses, in search of a more complete understanding. Her conclusions, which include the following comment, paint a rather different picture from normative opinion:
Rigorous, peer-reviewed studies suggest that companies do not perform better when they have women on the board. Nor do they perform worse. Depending on which meta-analysis you read, board gender diversity either has a very weak relationship with board performance or no relationship at all.
Klein also discussed possible reasons and implications of her findings. Boards and nominating committees would be well-advised to read Klein's commentary, understand the nuances and contextual factors and, most importantly, debate the implications for practice.
Postscript: Another review of the board diversity literature is available in my thesis (see pages 39–40).
Thoughts on corporate purpose, strategy and governance; our place in the world; and, other things that catch my attention.