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November 19, 2007


Rick Lightburn

I remarked to the previous post, and I'll again remark, that the study cited merely showed a correlation between the number of women on a firm's board of directors and that firm's likelihood of going bankrupt. Correlation is NOT causation, and one can imagine that there are reasons for the correlation that are contrary to any diversity story.

Kristian Ribberström

Yes, you are right in that. In my previous post I wrote that the figures "show that diversity leads to innovation or better decisions". I should have written "suggest" instead of "show". And that, of course, is still true - it doesn't show causation.

However, the analysts presented several ideas that support that there is causation behind the correlation. But that might have been caused by eagerness to prove something. Like you say, there can be many other factors behind the correlation. For instance, there is less female representation on the boards of companies that are dependent on heavy and risky investment.

Nevertheless the findings are interesting and I believe they are relevant in the diversity discussion. Thanks for your input!

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