If they really believe that they would let the market make it happen. It is because they don’t really believe it that they are trying to enforce it by law.
What are your specific thoughts on how would this process unfold?
Edit: On a second read of the article and parent comment, I understand it now as an ironic take on a flawed justification for the law that tries to satisfy everyone ("We're doing this for the markets!").
Edit: typo
If you're excluding a significant proportion of your population from leadership roles - which is what happens predictably, almost as if by magic, when "markets" make decisions about leadership - your markets are anything but free.
I believe you are using a non standard definition of "free market" here? Also I am not sure I understand what you mean by "excluding a significant proportion of your population from leadership roles". Of course, competency/qualification requirements excludes a large proportion of the population.
I also do not think that (most) proponents of a balanced representation favour diversity over competency. Speaking for myself, I do believe (from experience) that having diversity in a team results in more resilient, efficient, and "optimal" decision-making. Again, we do not have sufficient tools to prove that empirically, so we better A/B test the hell out of it :)
Mandated experiments are not experiments.
Those that fail to do so will see their share price lag behind their competitors.
Given that the feedback loop for government actions is slow and often time indirect, I’m not sure the government is making the best decision either.
They certainly have huge influence over policy. IMO it's extremely superficial to believe that just because they're not part of the official party political process they're somehow not in a senior leadership role.
Markets don't tend to experiment that much when they have something that works unless further competition shows up, see electric cars for example.
Markets are meant to serve humans, not the other way around.
How would that not happen? Businesses are always looking for an edge over the competition. If it was clear that women bosses outperformed men, any smart investor would insist on having them run the joint. The only counter argument would be that investors hate women more than they love money, which is just patently absurd on the face of it, since they obviously love nothing more than money.
You achieve straight A’s for a promised juice box reward, but the teacher refuses to give it to you because you’re a boy, and too many other boys got A’s in the past.
However a law that says that the board of a large enough company can’t be all male (and then also not all female) is actually not the stupidest idea.
It should absolutely be considered a temporary stop-gap and automatically revoked as soon as some threshold of women on boards is achieved, but it actually is sometimes necessary to give people a little kick in the butt to get things going.
I don’t live in California so I don’t know the specifics of this law, just saying that the idea in general is not as terrible as some of the bad woke stuff.
[1] I say privileged in quotes because usually it’s enough that people look similar to people that are or have been privileged.
It doesn’t do those individuals any good if you roll the laws back in a few years.
Your assumption is that board seats are being allocated to their rightful owners today, and this law would be a corruption of that. That’s a pretty big assumption. What rooms are you in where the ten most qualified people are _ever_ all male? Even in tech that’s not that common.
But it is also the reality that these seats aren’t really filled based on pure merit. It’s mostly (or at least a real prerequisite) a question if you belong to the right “club”. These laws expand the club a bit which I think is a good thing.
I agree that the idea that decision making will be better simply because there are women is suspect.
Many profession are also above the 90% segregation line, and most of them are women dominated professions. Most of those work places will have rooms where ten most qualified people are of the same gender. Most of those work places also have women dominating from the top.
Tech is actually pretty much in the average in terms of gender segregation, at around 70%.
Wow, I really hope you're not in any position of authority.
You may want to think hard about when millions of people have been wrong and trampled on rights you would wish for courts to protect. It may not always go your way based on your approach above.
If they aren't lining up women for the boards voluntarily, it is because nobody with money thinks there is a benefit from doing so. The effect is probably just the so-called Berkson's paradox [0] and will likely disappear if hiring teams start seeking out female candidates.
1. women on corporate boards are a competitive advantage for reasons stated above. 2. women on corporate boards are a competitive dis-advantage because of social factors based around the cultural idea that women are not normally on boards.
If that's the case, then the market won't unlock the advantages of the first factor unless something happens to disrupt the second factor.
I honestly don't know how anyone can believe the market will find the optimal outcome. At best it finds an optimal outcome within constraints put on it by the confused, reactionary, panicky, racist, sexist, bigoted people who are the things actually acting out "the market".
> We found evidence for a positive effect of women on corporate boards on both measures of company performance—ROA and PER—apart from the percentage of female executives in the case of ROA when estimated through pooled OLS. However, the outcomes of panel data fixed-effects and random-effects revealed the lack of connection between board gender diversity and ROA but a positive impact of the number and percentage of women on board on PER.
[1] https://jfin-swufe.springeropen.com/articles/10.1186/s40854-...
If you're bringing up a claim or a hypothesis in a discussion, you need to allow for the claim to be falsifiable.
There is, I believe, plenty of evidence in the literature of cultural factors like stereotypes, preconceptions, and prejudices having a very real impact on group performance. But that's not a specific claim about WHICH factors are at play in this circumstance.
You posted a study that seems to show no impact when adding women to boards, so I was pointing out how a study that doesn't control for those kinds of cultural inertia factors can't say anything about the existence or non-existence of those factors.
As for the specific example "if a diverse board leads to comparatively better outcomes, it's the fact that they were diverse, but if it doesn't, it's the fault of everyone not trusting the female-identifying board members enough" which you describe as an un-falsifiable claim, but it's not. Something as simple as an analysis of meeting calendars or emails on diverse and non-diverse boards might be able to determine if the communication patterns are a negative or positive influence on performance.
If the original claim ("Companies perform better with more women on boards") is not provable in a comparatively simple metric like growth, and if there are indications that in fact, 'other factors' like cultural inertia currently is diametral to female success in boards, then making a law that shoehorns more women in boards is not designed to make companies perform better, but to change the assumed cultural inertia at the expense of short- to medium-term economic growth. It becomes an experiment - with the countries that do not have that kind of laws and are unlikely to implement them as a control group (looking at you, China).
It only would be fair to tell that - instead of painting an unproven (and to some extend: disproven) claim a fact.
Differently from you, I don't assume the idea that co-ed teams will eventually outperform more homogenous teams is a foregone conclusion. Which means that there are scenarios in which we don't all win.
[1] https://finance.yahoo.com/chart/SHE#eyJpbnRlcnZhbCI6IndlZWsi...
If you wanted a good comparison you'd have to be comparing an equal sized subset of the DJI that only included boards with low diversity. Junk conclusions from junk data. When it was actually studied with rigor, e.g. the study you linked to (https://jfin-swufe.springeropen.com/articles/10.1186/s40854-...) "We found evidence for a positive effect of women on corporate boards on both measures of company performance—ROA and PER"
https://finance.yahoo.com/chart/SHE#eyJpbnRlcnZhbCI6IndlZWsi...
But even if there was, would that be a good reason to act on it? This "logic" never seems to be deployed in men's favour. It's obvious that strong male firefighters will have better outcomes than female firefighters, that's why New York had to make the qualification tests easier in order to hire more women. Yet the rules were changed anyway.
"I honestly don't know how anyone can believe the market will find the optimal outcome."
Because of enormous amounts of history, theory and practice showing that it will? BTW the "confused, reactionary, panicky, racist, sexist, bigoted people" would appear to describe the people breaking the law in order to ban men from powerful positions on the basis of their gender, wouldn't it.
Is it obvious, though? Sure, perhaps for a few specific things, but outside of a very limited set of things... probably not. You don't need to be a strong manly man to drive a fire truck nor to use hoses. The test probably didn't actually measure what was necessary before and likely disqualified women not because it was difficult, but because it didn't actually measure how fit for the job women were (example: Measuring upper body strength alone instead of measuring how well they could carry someone out of the fire or hooking up hoses). I mean, somehow women are strong enough to be lifting patients in a nursing home but not helping folks out in a fire? I doubt this.
It helps if you’re going to be doing literally anything other than just driving the apparatus.
Also, why should men be relegated to the most dangerous jobs, just so that we can fill a female hiring quota by giving women the safer, less demanding jobs?
> … nor to use hoses.
You absolutely need to be built to man a firehose.
It takes your full weight and strength to keep control of a hose with the diameters and pressures used in firefighting.
With a 2.5”+ hose, it can take two full-grown men to keep control of the line with the nozzle open, especially when advancing.
Nevermind hauling a charged line into a building, up stairs, etc. The weight alone is tremendous.
> I mean, somehow women are strong enough to be lifting patients in a nursing home
Male staffers are generally asked to do the lifting, and sometimes medical services literally call in the fire department for a lift assist.
> … but not helping folks out in a fire?
The structure gear alone weighs about 70 pounds. By the time you find someone in a building, you’ve been using a heavy tools, in the heat, to sound floors and search rooms rapidly in the most exhausting way possible.
It’s so much more difficult than just lifting someone without all the gear on.
There’s also forced entry into doors, etc, which benefits substantially from weight, leverage, and upper body strength.
> I doubt this.
Only because you know nothing about firefighting.
Of course this should have nothing to do with a board position. Perhaps women would actually excel in board positions as those mostly have to do with building/having social networks, something women certainly seem to be better at than men on average.
Most of it is going to be speculation until we see larger numbers and can compare boards with women to boards without (and even boards with only women). It's tough to say, as the 'old boys club' seems to be dying out regardless.
Re: 1, I don't know Re: 2, I believe that there is a place for affirmative action, especially in places like the boardroom where physical aspects of gender differences have no meaning. Re: 3, There's plenty of evidence showing places where markets are discriminatory in preference to being efficient: https://danluu.com/bad-decisions/
How many things can you think of - right now - for which there is clear evidence of benefit yet society has not adopted action? Systemic change is slow, sometimes laws help advance systemic change. The gender disparity gap in leadership is closing, but network effects will continue to operate to create inequitible opportunity for quite some time.
The idea that "if it was better the market will make it so" may be right in the fullness of time, but we live in what is effectively a zero-sum society when viewing the present. Patience for the long-tail of change advantages the already advantaged.
Which ones can you think of? Keep in mind the article is talking about markets and fiscal health of the company itself, not society as a whole. It's pretty easy to make the case "society would be better if we did the beneficial things", the question at hand is whether it's the governments place to push these on private actors.
This meta analysis study suggests that the suggests that the effect size of having a woman in the board is negligible, but the average number of women in the boards of the considered companies was low:
https://www.researchgate.net/publication/276057102_Does_Gend...
However more recent research finds a positive effect if the number of woman is higher ( they do not report an effect size though):
https://jfin-swufe.springeropen.com/articles/10.1186/s40854-...
This invites a "Laffer curve" like argument: surly we just do not have enough female board members jet.
"The market" is not an entity. It's a collective of people, those people have prejudices and friends. Those primarily factor into what happens - thus, more of the same in-group ends up at the top. This is frankly such a base explanation it's bordering on bad-faith reasoning, but I'm willing to give you the benefit of the doubt.