Blackwood Group: Diversity and the Performance Relationship

According to an article by Dr. Mike Rugg-Gunn, posted by Blackwood Group, diversity at work means different things to different audiences; traditional definitions include reference to race, ethnicity, gender, age, religion, ability and sexual orientation.

It can be viewed as a source of information, knowledge and expertise that delivers positive team outcomes as well as a factor creating subgroups within the team that may disrupt team process and performance; and there is the rub – it is a force for both effective and less effective work practices. There is a strong social justice agenda to suggest that the encouragement of Diversity in all its variant forms is ‘the right thing to do’. Beyond this, many studies have sought to link Diversity to commercial performance criteria and nowhere has this been most prominent than in the Women on Boards debate where several studies purport to show a link between Women on Boards and financial performance.

There are however strong methodological problems (e.g. reverse causation and lack of control experiments, to name but two) with many of these studies. More scientific and robust methodologies report very small correlations between the presence of female board members per se and financial success; in some findings this was neutral and others negative.

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