Academic Report: Having Chicks on Your Board Is Bad for Your Stock

The Telegraph:

Companies with women directors perform badly on stock market, report claims
Those companies that have just one female director on their board are considerably undervalued – in terms of their share price – compared with companies run entirely by men.
The study by the University of Exeter, published in the British Journal of Management, makes clear, however, that companies with women directors perform just as well when it comes to making profits.
Prof Alex Haslam, a psychologist at the University of Exeter, said the lengthy study had tried to strip out any coincidental factors, such as women tending to run retail and technology companies, which might have performed badly during the period of the study: 2001 to 2006.
“However, the evidence is very strong that gender is the unique factor in this pattern.
“The market very clearly responds to women’s appointments to boards in an adverse way. Or – to put it another way – they like to back all-male boards. Maybe investors see them as a safe bet.”
The study examined FTSE 100 companies, Britain’s biggest companies listed on the stock market. At the start of the study, half of all of the companies had all-male boards, but by 2006 just 15 per cent did, suggesting that a quiet revolution had happened during the time, with more female executives making it to the top even if only a handful made it to the very top job of cheif executive. Marjorie Scardino at Pearson and Rose Marie Bravo at Burberry were, at one stage, the only two women to head a FTSE 100 company.
However, 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.

Also…have you seen them drive?

Posted by on August 13th, 2009 at 1:41 pm


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