Bad Journalism/Bad Advocacy
Gender Diversity Doesn’t Boost Corporate Profits

The fact that women are dramatically underrepresented at the highest tiers of American corporate leadership—and that, for many years, they were greeted with discrimination and dismissal when they tried to break in—has given rise to an understandable effort, especially at elite financial and technology companies, to increase gender diversity on corporate boards. Initially, feminists argued that such efforts were important as a matter of basic fairness—to redress the effects of discrimination, past and present. Recently, however, some of the more ardent champions of corporate diversity have taken to making a different, and more provocative, argument: that increasing the share of women on boards and workgroups dramatically improves companies’ economic performance.

The problem, argues Northwestern University Professor Alice Eagly in a recent paper in the Journal of Social Issues, is that such claims—while usually backed by the best of intentions—simply don’t hold up under scrutiny. They are based on a combination of substandard research, a misreading of that research by impassioned political activists, and the failure of social scientists to act as “honest brokers” when they “produce findings that are not what advocates want to hear.” From the abstract:

In an ideal world, social science research would provide a strong basis for advocacy and social policy. However, advocates sometimes misunderstand or even ignore scientific research in pursuit of their goals, especially when research pertains to controversial questions of social inequality. To illustrate the chasm that can develop between research findings and advocates’ claims, this article addresses two areas: (a) the effects of the gender diversity of corporate boards of directors on firms’ financial performance and (b) the effects of the gender and racial diversity of workgroups on group performance. Despite advocates’ insistence that women on boards enhance corporate performance and that diversity of task groups enhances their performance, research findings are mixed, and repeated meta-analyses have yielded average correlational findings that are null or extremely small.

As Eagly notes—echoing Christina Hoff Sommers and other feminists critical of some of some of the movement’s excesses—propagating false or misleading statistics does not generally serve women well. The same goes for other familiar statistics often repeated by women’s advocacy groups: that women make 77 cents for every dollar a man earns, or that one in five women will be raped during their time in college. There are surely ways to attack issues like sexual violence and workplace discrimination without resorting to discredited statistics, which are likely to only corrode feminists’ credibility in the long run. And there is surely a case to be made for creating more opportunity for women in business that doesn’t rest on the premise that gender diversity has a measurable impact on companies’ bottom line (even if, as Eagly points out, that kind of argument is particularly attractive to today’s neoliberal corporate elites).

Eagly’s work also highlights some of the benefits that might flow from a more politically diverse class of academic social scientists. Just as left-leaning professors are more likely to challenge research that is seized on by right-wing activists, right-leaning professors might be more likely to challenge claims that are seized on by left-leaning activists. The problem is that many social science fields have no political diversity whatsoever, so the research process—which relies on competition, falsification, and sustained skepticism—can get out of whack, especially with respect to the most politically charged questions.

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