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Companies with women on boards fare worse on stock market
August 14th, 2009 - 2:10 pm
Washington, August 14 (ANI): Companies in which women are board members fare worse on the stock market, according to a study conducted by researchers at the University of Exeter.
The researchers have found that companies with female board members this face stockmarket prejudice despite performing as well on all other measures as those with all-male boards.
Writing about their observations in the British Journal of Management, they say that shareholders respond negatively to women being appointed to their boards, causing share values to decline.
The researchers conducted a comprehensive analysis of performance data from all FTSE 100 companies between 2001 and 2005, which found that companies with all-male boards had a market valuation equivalent to 166 per cent of their book value, while companies with at least one female board member had a market value equal to just 121 per cent of book value.
They, however, also noticed that appointing a woman to a company board did not compromise objective measures of financial performance, specifically, Return on Assets and Return on Equity.
In fact, they found that, as a whole, companies with women on their board were a far better investment than those without.
The researcher say that their findings suggest that shareholders systematically over-value companies with all-male boards, while being unenthusiastic about the appointment of women to senior positions.
They say that this is despite there being no evidence that women’s appointment has an adverse impact on company’s performance.
The findings also fit with previous research from the University of Exeter which has shown that women are appointed to leadership positions when a company is in crisis. Dubbed the ‘glass cliff’ phenomenon, this trend involves women being placed in precarious positions when there is a high risk of failure. This has led to women being associated with weak performance.
Lead author Professor Alex Haslam, a psychologist at the University of Exeter, said: “Our study shows very clearly that shareholders tend to devalue companies with women board members and to chronically over-value those with all-male boards. What is not clear is whether this is because shareholders feel that women perform less well on boards than men or whether they see a woman’s appointment as a signal that the company is in crisis. Whatever the reason, it is clear that this response is unwarranted, because there is no objective evidence that having female board members damages a company’s performance. If anything, the opposite is true.” (ANI)
Are women programmed for failure?
February 10th, 2010 - 4:25 pm
London, Feb 10 (IANS) Leadership positions in business have proven to be precarious for women. Female business leaders are more likely to be appointed to powerful leadership positions when an organisation is in crisis or high-risk circumstances.
Michelle Ryan, associate professor in psychology at the University of Exeter, who researched the subject, proposes that this scenario of “the glass cliff” extends to the political arena.
During the Britain 2005 general election, the seats Conservative party female candidates were vying for were considered virtually “unwinnable”, and the results were more likely to favour the male Labour party candidates.
The reasons behind voter behaviour and business appointments are difficult to pinpoint and controversial.
Ryan proposes that at the root of the issue is the perception that women are less competent than males, despite evidence that women have broken through “the glass ceiling” and have finally achieved gender equality.
In the EU, women make up just over 10 percent of the top executive positions in the top 50 publicly quoted companies, and in the US female leaders occupy less than 16 percent of these positions in the Fortune 500.
As women continue to be under-represented in politics and business, this stereotype is often reinforced and self-perpetuating, said an Exeter release.
Ryan says: “Gender discrimination in politics can be subtle and difficult to identify. Women continue to be under-represented in political office and often face a more difficult political task than men.”
Her research is slated for March publication in Psychology of Women Quarterly.
August 14th, 2009 - 2:10 pm
Washington, August 14 (ANI): Companies in which women are board members fare worse on the stock market, according to a study conducted by researchers at the University of Exeter.
The researchers have found that companies with female board members this face stockmarket prejudice despite performing as well on all other measures as those with all-male boards.
Writing about their observations in the British Journal of Management, they say that shareholders respond negatively to women being appointed to their boards, causing share values to decline.
The researchers conducted a comprehensive analysis of performance data from all FTSE 100 companies between 2001 and 2005, which found that companies with all-male boards had a market valuation equivalent to 166 per cent of their book value, while companies with at least one female board member had a market value equal to just 121 per cent of book value.
They, however, also noticed that appointing a woman to a company board did not compromise objective measures of financial performance, specifically, Return on Assets and Return on Equity.
In fact, they found that, as a whole, companies with women on their board were a far better investment than those without.
The researcher say that their findings suggest that shareholders systematically over-value companies with all-male boards, while being unenthusiastic about the appointment of women to senior positions.
They say that this is despite there being no evidence that women’s appointment has an adverse impact on company’s performance.
The findings also fit with previous research from the University of Exeter which has shown that women are appointed to leadership positions when a company is in crisis. Dubbed the ‘glass cliff’ phenomenon, this trend involves women being placed in precarious positions when there is a high risk of failure. This has led to women being associated with weak performance.
Lead author Professor Alex Haslam, a psychologist at the University of Exeter, said: “Our study shows very clearly that shareholders tend to devalue companies with women board members and to chronically over-value those with all-male boards. What is not clear is whether this is because shareholders feel that women perform less well on boards than men or whether they see a woman’s appointment as a signal that the company is in crisis. Whatever the reason, it is clear that this response is unwarranted, because there is no objective evidence that having female board members damages a company’s performance. If anything, the opposite is true.” (ANI)
Are women programmed for failure?
February 10th, 2010 - 4:25 pm
London, Feb 10 (IANS) Leadership positions in business have proven to be precarious for women. Female business leaders are more likely to be appointed to powerful leadership positions when an organisation is in crisis or high-risk circumstances.
Michelle Ryan, associate professor in psychology at the University of Exeter, who researched the subject, proposes that this scenario of “the glass cliff” extends to the political arena.
During the Britain 2005 general election, the seats Conservative party female candidates were vying for were considered virtually “unwinnable”, and the results were more likely to favour the male Labour party candidates.
The reasons behind voter behaviour and business appointments are difficult to pinpoint and controversial.
Ryan proposes that at the root of the issue is the perception that women are less competent than males, despite evidence that women have broken through “the glass ceiling” and have finally achieved gender equality.
In the EU, women make up just over 10 percent of the top executive positions in the top 50 publicly quoted companies, and in the US female leaders occupy less than 16 percent of these positions in the Fortune 500.
As women continue to be under-represented in politics and business, this stereotype is often reinforced and self-perpetuating, said an Exeter release.
Ryan says: “Gender discrimination in politics can be subtle and difficult to identify. Women continue to be under-represented in political office and often face a more difficult political task than men.”
Her research is slated for March publication in Psychology of Women Quarterly.
