Why 'meddling' women in the boardroom can wreck a company's performance
Too many cooks spoil the broth, apparently
Employing more women in the boardroom can wreak havoc on the financial performance of companies, fresh research suggests. Two academics found that female directors were more likely to 'meddle' with boards and get rid of male chief executives who are not up to the job. However, their more ruthless approach could produce unexpected results and be 'bad for a company's coffers', the study found.
The research, published in the Journal of Financial Economics, found that having more women in the boardroom could have a 'negative effect on financial performance'. On average, it found that firms with proportionally more women on their boards are less profitable and have a lower market value.
It comes at a time when businesses are under pressure to recruit more women and people from ethnic minorities in a bid to break the dominance of middle-class men in the boardroom. Despite this, women still hold less than 12 per cent of directorships in FTSE 100 companies.
The study of nearly 2,000 companies between 1996 and 2003 concluded that boards with more women were better at tasks such as 'executive supervision and monitoring'. Women also had a better record of attending board meetings, which appeared to have a beneficial 'knock-on effect' on their male counterparts. However, it found that while female traits often helped badly-run companies, they could have a negative effect on those that were well-governed.
Daniel Ferreira, of the London School of Economics, who compiled the research with Renee Adams of the University of Queensland, said: 'This is a complicated picture. 'Our research shows that women directors are doing their jobs very well. 'But a tough board, with more monitoring, may not always be a good thing.
'Women behave more like independent directors - they are less likely to move in the same social circles as the chief executive or play golf together and so they are going to be tougher. 'Having women on the board makes the board tougher on monitoring chief executives, but that doesn't necessarily translate into better profitability and stock market performance. 'Indeed, we see that increased monitoring can be counter-productive in well-governed companies.'
Dr Ferreira also said he doubted whether having more women directors could have prevented the banking crisis. While they were likely to have been tougher on chief executives after performance had fallen, he said it was 'difficult to say' whether they would have prevented the problems in the first place.
He said meddling with boards could result in a loss of trust and a lack of information-sharing, which could reduce profitability.
The research appears to contradict earlier studies which have shown that companies with a higher number of female directors significantly outperformed other businesses. Research published two years ago by Catalyst, an organisation that aims to bolster business opportunities for women, uncovered significant gaps in three key financial areas between companies with the highest percentages of female directors and those with the lowest. [So they found what they aimed to find. How unsurprising]
Dr Ferreira said the research was not intended to send the message that 'we need less women on boards'. 'A board is not, after all, exclusively directed towards profit,' he said. 'However, we can see that when you meddle with boards there may be unintended consequences. 'This is particularly important to bear in mind when companies are under increasing pressure to change the composition of their boards.'
The REAL gender gap scandal: Why boys are now the true victims of discrimination
As one of six daughters growing up in the Seventies, girls were so little prized compared with boys that a friend of my father even expressed his sympathy rather than congratulations when my youngest sister, a perfectly healthy child, was born. Can you imagine that happening now? I rather doubt it. In an almost complete reversal of attitudes, today's parents long for girls.
As the mother of an only child, a son, I do not think I am exaggerating in saying that I detected something akin to sympathy when we announced that we had a boy. People may be more tactful these days, but there were expressions of regret that we would not be able to buy 'all those pretty pink baby clothes', and at least one close relative who sighed: 'I always thought you'd have a girl.'
At the heart of this new preference lies the fact that all parents want their children to succeed in life - and quite simply, in today's Britain, girls are more likely so to do. Building on a trend that began more than a decade ago, girls are outperforming boys at every level in education. They get more and better GCSEs and A-levels, win more places at top universities and gain better degrees.
Although poor attainment is concentrated in the lower income groups, the gender gap persists to the detriment of boys across all social classes and ethnic groups. And as this week's dismal primary school test results reveal, boys are sinking farther and farther behind. A depressing 40 per cent of boys will begin secondary school unable to write fluently and correctly, compared with 25 per cent of girls. How can this be happening?
It is to our shame that the reasons for boys' underachievement are so well researched and documented that they are no longer regarded as controversial, even among the education establishment. And yet still the reasons persist.
Boys' educational achievement began to lag behind girls from the late Eighties - around the time GCSEs replaced O-levels. There were warnings that the new qualification, with its emphasis on course work rather than final exams, would favour girls - and so it has proved. Teenage girls tend to be more conscientious and dedicated to long-term projects, while boys are better at cramming and thrive in the adrenaline-fuelled arena of the exam.
If any doubt remained, it was cast aside in a study published in June by the prestigious Higher Education Policy Institute. It cited the GCSE as the 'most likely cause' of the gender equality gap in higher education. The report cites the style of teaching, content and questions at GCSE, which trigger an educational disadvantage among boys compared to girls, which lingers through to A-levels and beyond.
Those results have an inevitable impact on further education. Girls have all but reached the government target of 50 per cent going on from school to study for a degree, while boys are way behind at 38 per cent.
Answering counter-claims that the introduction of GCSE and the continued relatively poor performance of boys is just a coincidence, the study points out that in research by the Organisation For Economic Co-operation And Development, where more than 13,000 15-year-olds sat what might be termed 'traditional' tests, girls scored better in reading, while boys achieved more correct answers in maths and science. When the same pupils sat GCSEs, however, the girls did better in all subjects.
'I think GCSEs look as if they are to blame,' argued the institute's director, Bahram Bekhradnia. 'And if there is a suggestion that the nature of GCSEs is putting boys at a disadvantage and meaning that they do less well in school, then that needs to be dealt with, because these kids are missing out.' But it has not been dealt with, and neither has the other crucial factor which helps convince many boys - long before GCSEs loom - that study is not for them. It is the near total absence of male teachers in primary schools.
One in four primaries in England has not a single man on the staff, although there is little disagreement among educationists that male primary teachers can have a powerful and positive impact on children, particularly boys. Boys benefit from a male teacher reading and writing with them. In a poll carried out last year for the Training And Development Agency For Schools, more than a third of boys said they felt that having a male primary teacher challenged them to work harder at school. Around half said they were more likely to have asked a male teacher for help over bullying or problems with school work.
Another large-scale study, carried out for the Government by academics at Cambridge University, identified the need for male role models, not only as teachers, but as visiting speakers and volunteers in school. Without them, too many boys reject learning as 'for sissies' and 'uncool'. It is a situation that the national body responsible for training teachers - the Training And Development Agency For Schools - says it is working hard to remedy. Yet the number of male applicants for primary school training remains at a pitifully low 15 per cent.
Experienced teachers will privately admit that the predominance of women is influencing teaching styles to the detriment of boys. Take English, where teachers will quite naturally opt for texts they themselves have enjoyed. In some instances, these will be a complete turn-off for the boys in the class.
In one research experiment, children completed two comprehension tests, reading extracts and answering questions. The passages were very different: one a description of a spider, the other a piece about the feelings of a child forced to flee war-torn Europe. The boys scored better with the spider, the girls with the child refugee. The fact is that boys are not captivated by stories about relationships and emotions. Like many mothers, I learned this lesson from my son, Tony, who glazed over with boredom when I tried reading aloud The Velveteen Rabbit, a childhood favourite of mine that can still move me to tears. He prefers humour - the more lavatorial the better - and adventure.
Of course, good schools understand and are sensitive to boys' tastes in books. At our village primary, Tony has reached the required grade in English a year early, but I know from friends - some of whose children are being taught in private schools - that this is not always the case.
Yes, it is true that boys and girls have always developed at different rates: little girls start school with a natural advantage in speech and in what the experts call the 'fine motor movements', crucial in holding a pen.
But where in the past it was recognised that boys completely catch up by the final years of primary school, and put on an intellectual spurt in late adolescence that places them on a par with girls, too often these days the initial disadvantage becomes permanent.
All schools - state and private - now concentrate on results from the earliest stages of education. So boys who start slowly can be left behind in classes that are pushing ahead to get the most from the best pupils, mainly the girls. Where once small boys might have been encouraged to play in the early years, these days they can be forced to join in lessons completely beyond them.
A neighbour whose six-year-old was at a private school and unable to read was astonished to find him being sent home to study complex spellings which would be later tested in class. When she complained, she was told that there were girls who could manage them easily, and if her son could not keep up, she should move him to a different school.
Boys also suffer in today’s results-driven classrooms because of their sheer physical energy. Many have to burn off great natural reserves of energy before they can settle down to anything quiet - be it study or sleep.
As a new mother, it came as a huge shock to me when Tony wailed to be out of his pram as soon as he could walk. As a toddler, he demanded to go to the park in all weathers. Without exercise he would be hurling himself off the sofas at the end of the day. We used to joke that, like a labrador, he must be walked or he would chew the furniture.
In many homes, a little boy’s need for exercise is regarded as, at best, a nuisance and, at worst, an illness called ‘hyperactivity’ to be ‘cured’ with drugs which act as a chemical cosh. In schools, these needs often simply cannot be met because playing fields have been sold off and playgrounds are too small to accommodate games of football, rugby or cricket.
And as the mother of a son, I fervently believe that underlying every factor contributing to boys’ underachievement in education is a collective failure to understand, recognise and value the qualities that are distinctly male. As Michael Gurian - a therapist and author who has pioneered efforts to use brain research to understand the social and emotional needs of children - puts it, a generation of boys has been failed by us all.
‘We have been in the decade of the girl,’ says Gurian, whose new book, The Purpose Of Boys, was published in June. ‘Communities, families and schools have focused on studying, understanding and valuing what girls need in the new millennium. But in doing that, they failed to give boys any direction in life. ‘As an advocate for boys, I see a world in which boys are asking us every day, and mainly through their actions: “What is the purpose of boys?” And for the most part, our culture is answering: “We don’t know.” ’
In the days when all young men might have been called on to fight, it was easy to answer the question: ‘What are boys for?’ Boys were for courage and honour; for protecting the weak against the strong.
I will never forget the letter a close friend shared with me. It was sent to her husband while he was serving in World War II, preparing for the D-Day landings, and was from his father. ‘Son, I am proud of you,’ it reads. ‘Always be brave and true.’ Later in the same note there is advice on how to behave with women: ‘Never forget your own dear sister, and try to treat women as you would like her to be treated.’
Today, such values may seem ‘old-fashioned' and ‘out of touch’. But when I see my son play-fighting with his friends, I can detect the willingness to brush off hurts, the good humour and, when much smaller boys are playing, the protectiveness that demonstrates all the best of the difference in men. They have always been a part of the male character - and they always will be.
As mothers, it is surely to our shame that we do not sit and laugh together and appreciate our boys in the way we praise the quiet, cooperative play of our girls. Imagine for a moment the outcry that would follow - from parents, politicians, the teaching unions - if girls began to lag behind boys in school. Yet there is a widespread silence on the very real problem of boys’ underachievement, as though by raising it we are somehow anti-women. Some education specialists even ask if it matters - as though boys’ failure is the natural downside to women’s greater success; as if the current situation represents some kind of natural order where women must go beyond equality and always come out on top.
Of course it matters, just as it mattered 30 years ago when fewer girls than boys made it to university. It matters because it is unjust, and it matters because it is a shameful waste of talent and one that we can ill-afford.
As someone who has benefitted enormously from the women’s movement, I deplore the prospect of a generation of disadvantaged young men failing to reach their true potential and missing out on university and the chances it brings. We all gain from a better educated population - in greater prosperity, better health, better relationships, better child-rearing. We should all be worried by the prospect of an army of undereducated and alienated men. And if we continue to ignore the yawning gender achievement gap in our schools, then we will all suffer as a result.
With imprisonment up, crime is down
by Jeff Jacoby
OF THE 2.3 million people incarcerated in prisons and jails in the United States, roughly 140,000, or 6 percent, are serving life sentences. Of that number, about 41,000 -- i.e., 29 percent of the lifers, or 1.8 percent of all inmates -- were sentenced to life without parole. Both numbers are at an all-time high.
Should Americans be troubled by this? The Sentencing Project thinks so. In a new report, the liberal advocacy group -- which describes itself as a promoter of "alternatives to incarceration" -- complains that the growth in life sentences has been costly and unjust. It "challenges the supposition that all life sentences are necessary to keep the public safe." It particularly disapproves of life-without-parole sentences, which, it claims "often represent a misuse of limited correctional resources and discount the capacity for personal growth and rehabilitation that comes with the passage of time."
As a matter of policy, the Sentencing Project supports abolition of both the death penalty and life without parole. In its view, even a vicious mass murderer deserves a chance at parole. That is an eccentric position that most Americans clearly don't share. Nevertheless, the group's new report -- "No Exit: The Expanding Use of Life Sentences in America" -- has drawn media attention; stories have appeared in The New York Times, The Washington Post, USA Today, and Agence France-Presse, among other outlets.
But good PR is not a substitute for sound analysis. The problems with "No Exit" begin with the first paragraph, which asserts that the high incarceration rate in the United States is the result of "three decades of 'tough on crime' policies that have made little impact on crime."
America's prison population has indisputably grown in recent years, as prison sentences have lengthened and more criminals have been locked up. But far from negligible, the "impact on crime" has been dramatic. According to the Bureau of Justice Statistics, Americans experienced 44 million crimes in 1973. By 2007, the number of criminal victimizations had dropped to 23 million. During those "three decades of 'tough on crime' policies," in other words, crime in America was nearly halved -- and this even as the population grew by more than 75 million. Since the mid-1990s, the plunge in violent crime has been especially steep: from more than 51 crimes of violence per 1,000 US residents in 1994 to 21 in 2005 -- a 59 percent reduction.
Research analyst Ashley Nellis, lead author of the Sentencing Project's new report, concedes that it is "intuitive" to attribute the striking reduction in crime to the fact that many more criminals are behind bars. But some researchers, she told me yesterday, have determined that incarceration rates account for no more than one-fourth of the drop in crime. Among those she mentioned was economist Steven Levitt, who is perhaps best known for his controversial Freakonomics argument that the legalizing of abortion in the 1970s helps explain the crime reduction of the 1990s.
Yet even Levitt has estimated that for each additional criminal locked up, there is "a reduction of between five and six reported crimes." In a 2004 paper, he identified "increases in the prison population" as more significant than any other factor in explaining the drop in homicide and other violent crimes. The Sentencing Project may insist that incapacitating criminals through more and longer prison sentences has "made little impact on crime," but those prison sentences have spared countless Americans from being assaulted, robbed, raped, and murdered.
Nowhere in "No Exit" is there any breakdown of the crimes that led to the 140,000 life sentences now being served. Yet the report devotes almost obsessive attention -- including five statistical tables -- to the alleged racial disparity those sentences reflect. About 48 percent of lifers are black, 33 percent are white, and 14 percent are Hispanic. "These figures are consistent with a larger pattern in the criminal justice system," the report notes, "in which African Americans are represented at an increasingly disproportionate rate across the continuum from arrest through incarceration."
Yet the report mentions only in passing another striking disparity: Nearly 97 percent of inmates serving life terms are men. If it is noteworthy that blacks, who account for 12 percent of the general population, make up 48 percent of lifers, shouldn't it be even more significant that men, who comprise less than half the population at large, represent nearly all those sentenced to life?
The explanation, of course, is that men commit the vast majority of serious crime; that hard fact, not sexism, explains the disproportionate male incarceration rate.
Likewise the racial disparity: Though blacks account for just one-eighth of the US population, they are six times more likely than whites to be murdered, and seven times more likely to commit murder. That hard fact, not racism, explains the high proportion of lifers who are black. But such inconvenient facts appear nowhere in the Sentencing Project's report. "No Exit" brims over with information and statistics -- but only the ones that reinforce its sponsor's preconceived views.
Who May Harm Whom?
by Walter E. Williams
"No one has a right to harm another." Just a little thought, along with a few examples, would demonstrate that blanket statement as pure nonsense. Suppose there is a beautiful lady that both Jim and Bob are pursuing. If Jim wins her hand, Bob is harmed. By the same token, if Bob wins her hand, Jim is harmed. Whose harm is more important and should the beautiful lady be permitted to harm either Bob or Jim are nonsense questions.
During the 1970s, when Hewlett-Packard and Texas Instruments came out with scientific calculators, great harm was suffered by slide rule manufacturers such as Keuffel & Esser, and Pickett. Slide rulers have since gone the way of the dodo but the question is: Should Hewlett-Packard and Texas Instruments have been permitted to inflict such grievous harm on slide rule manufacturers? In 1927, General Electric successfully began marketing the refrigerator. The ice industry, a major industry and the livelihoods of thousands of workers, was destroyed virtually overnight. Should such harm have been permitted and what should Congress have done to save jobs in the slide rule and ice industries?
The first thing we should acknowledge is that we live in a world of harms. Harm is reciprocal. For example, if the government stopped Hewlett-Packard and Texas Instruments from harming Keuffel & Esser and Pickett, or stopped General Electric from harming ice producers, by denying them the right to manufacture calculators and refrigerators, they would have been harmed, plus the billions of consumers who benefited from calculators and refrigerators. There is no scientific or intelligent way to determine which person's harm is more important than the other. That means things are more complicated than saying that one person has no rights to harm another. We must ask which harms are to be permitted in a free society and are not to be permitted. For example, it's generally deemed acceptable for me to harm you by momentarily disturbing your peace and quiet by driving a motorcycle past your house. It's deemed unacceptable for me to harm you by tossing a brick through your window.
In a free society, many conflicting harms are settled through the institution of private property rights. Private property rights have to do with rights belonging to the person deemed owner of property to keep, acquire, use and dispose of property as he deems fit so long as he does not violate similar rights of another. Let's say that you are offended, possibly harmed, by bars that play vulgar rap music and permit smoking. If you could use government to outlaw rap music and smoking in bars, you would be benefited and people who enjoyed rap music and smoking would be harmed. Again, there is no scientific or intelligent way to determine whose harm is more important. In a free society, the question of who has the right to harm whom, by permitting rap music and smoking, is answered by the property rights question: Who owns the bar? In a socialistic society, such conflicting harms are resolved through government intimidation and coercion.
What about the right to harm oneself, such as the potential harm that can come from not wearing a seatbelt. That, too, is a property rights question. If you own yourself, you have the right to take chances with your own life. Some might argue that if you're not wearing a seatbelt and wind up a vegetable, society has to take care of you; therefore, the fascist threat "click it or ticket." Becoming a burden on society is not a problem of liberty and private property. It's a problem of socialism where one person is forced to take care of someone else. That being the case, the government, in the name of reducing health care costs, assumes part ownership of you and as such assumes a right to control many aspects of your life. That Americans have joyfully given up self-ownership is both tragic and sad.
Political correctness is most pervasive in universities and colleges but I rarely report the incidents concerned here as I have a separate blog for educational matters.
American "liberals" often deny being Leftists and say that they are very different from the Communist rulers of other countries. The only real difference, however, is how much power they have. In America, their power is limited by democracy. To see what they WOULD be like with more power, look at where they ARE already very powerful: in America's educational system -- particularly in the universities and colleges. They show there the same respect for free-speech and political diversity that Stalin did: None. So look to the colleges to see what the whole country would be like if "liberals" had their way. It would be a dictatorship.
For more postings from me, see TONGUE-TIED, GREENIE WATCH, EDUCATION WATCH INTERNATIONAL, FOOD & HEALTH SKEPTIC, GUN WATCH, SOCIALIZED MEDICINE, AUSTRALIAN POLITICS, DISSECTING LEFTISM, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN. My Home Pages are here or here or here. Email me (John Ray) here. For readers in China or for times when blogger.com is playing up, there is a mirror of this site here.