McKinsey was launched in 1926 and for many years has been one of the world’s largest and most influential management consulting firms. It has for many years (in its published reports) been promoting the cause of “more women on boards”, inferring a causal link between increasing gender diversity in the boardroom (GDITB) and improved financial performance. In McKinsey’s earlier reports on the subject, they would have a large amount of material on the observed correlation between GDITB and financial performance. What might account for the correlation, you might well ask? In our view, more financially successful companies can better afford to pay for initiatives with social objectives in mind, e.g. increasing GDITB. Such initiatives play well with women, including as customers. It was usually not too difficult to find a paragraph or two buried deep in the reports (sometimes 100+ pages long) clarifying they weren’t claiming a causal link, i.e. they weren’t claiming that increasing GDITB would lead to improved financial performance. But there was invariably a lot of material on why companies should increase GDITB anyway. Campaign for Merit in Business has been reporting since 2012 the evidence that already existed at that time of the causal link between increasing GDITB and financial performance DECLINE. Mike Buchanan presented that evidence to House of Commons and House of Lords inquiries in Decembber 2012, and he’s not aware of any coverage of the evidence in the mainstream media. Yesterday McKinsey published its most woeful report yet on the subject, Diversity matters even more: The case for holistic impact. A sentence taken at random should give you a flavour of this ridiculous report:

The penalties for low diversity on executive teams are also intensifying. Companies with representation of women exceeding 30 percent (and thus in the top quartile) are significantly more likely to financially outperform those with 30 percent or fewer.

It’s impossible to read such sentences without gaining the impression that companies will improve their financial performance if they increase GDITB. I’ve carried out a speed-read of the report and cannot find anything about there being no causal link between GDITB and improved financial performance. The authors:

Sundiatu Dixon-Fyle is a senior fellow in McKinsey’s London office; Celia Huber is a senior partner in the Bay Area office; María del Mar Martínez Márquez is a senior partner in the Madrid office; and Sara Prince is a senior partner in the Atlanta office, where Ashley Thomas is a client delivery director. Dame Vivian Hunt is the chief innovation officer at UnitedHealth Group and a McKinsey alumna.

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