The Returns from Diversity

princeofpounds

That sounds a lot like supposition princeofpounds. Have you any research to back it up.

Sorry, which bit?

princeofpounds

So companies with women on the board are more highly geared?

Indeed, another possible explanatory factor that hasn't been adjusted for.

Generali

princeofpounds wrote: »

Sorry, which bit?

My apologies, I'm posting from the phone having moved house which makes quoting difficult.

I mean the bit about diffences in men and women's pay being solely down to bearing children.

Generali

michaels wrote: »

So companies with women on the board are more highly geared?

Nope. Higher gearing by itself would simply increase the spread of gains and losses.

princeofpounds

Generali wrote: »

My apologies, I'm posting from the phone having moved house which makes quoting difficult.

I mean the bit about diffences in men and women's pay being solely down to bearing children.

Oh right, well I don't want to make this a total discussion about the gender pay gap, as I actually think the boards issue is separate and interesting in its own right.


I'll have to dig out academic studies, but an example of the sort of thing I mean from a corporate study is in the link below. The methodology is far superior to the MSCI corporate study (largely because it does take influence from the more rigorous and less political academic studies).


http://www.economist.com/blogs/freeexchange/2015/11/women-workplace

I'm not saying that having children is the only factor, but it's certainly the dominant one these days.


As for the gearing point - it does amplify returns, both positive and negative, but given the (fair) assumption that the distribution of returns is positive over the period of the study, then extra gearing would end up with higher ROEs all else equal.

tincans6

princeofpounds wrote: »

It is, for example, quite possible that more women are put on the boards of less capital intensive industries (retail, tech, whatever). Higher capital intensity typically driving lower ROE, for example (which is incidentally not remotely a good measure of company performance without any context, as is primarily driven by market structure and business models of industries)


.

Indeed - the worst sectors for women at board level are mining and engineering, the best are retail and insurance.