OSU Studies Link between Women Board Members and Profitability

By Davis, KirLee | THE JOURNAL RECORD, October 11, 2010 | Go to article overview

OSU Studies Link between Women Board Members and Profitability


Davis, KirLee, THE JOURNAL RECORD


Can having women board members improve a company's profits?

"That's the $64,000 question," said David A. Carter, associate professor of finance at Oklahoma State University's Spears School of Business. "It seems like a straightforward proposition. But in practice, it's very difficult."

Hoping to get beyond the loaded politics behind that diversity question, a trio of OSU professors sought to quantify that answer statistically by studying earnings of the Standard & Poor's 1,500 Index companies. But that answer proved as elusive as the economy's recovery.

"The statistical analysis, depending on how you do it, will give you different answers," said Gary Simpson, a professor of finance and the Oklahoma Bankers Association chair of Commercial Bank Management. "The results are not robust to the methodology."

As the Enron scandal heightened public scrutiny on corporate boards of directors, Carter joined with Simpson and Betty Simkins to study the impact women directors had on 2003 corporate financial results. They approached this by statistically factoring out time- sensitive issues, such as the lingering 9/11 recession and natural gas trading scandal, and differences separating the economic sectors of these S&P companies, such as banking and manufacturing.

That provided a constant for comparing base earnings to board composition, all without trying to judge the value of women directors, their different insights or their decision-making processes.

"We don't actually trace it through everything that happens," said Simpson, explaining how the study didn't analyze individual board actions. "We just look at the number of women on the board and what is the result."

Their first paper, covering 2003 financial results, found a definitive correlation between rising corporate profits and the percentage of women on the board. Simpson said that positive result drew their study widespread attention and numerous research and corporate citings.

Their second study, which added data through 2007, proved far less conclusive.

"Normally when you have a really nice positive relationship, the methodology will often be robust," said Carter. "That this is not, it tells me that the relationship is sort of at the margin.

"I guess the bottom line is that there's still no definitive answer," he said. "The results are still very sensitive to the methodology used."

That led Simpson to a bottom-line contingency view.

"That is the way of a lot of things in the world," he said. "Unfortunately for anybody who wants a good clean result, basically it depends on the company. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

OSU Studies Link between Women Board Members and Profitability
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.