Gender inequality – Diversity: the alternative view
In a month that saw hundreds of thousands of women worldwide unite in disgust at the proposed policies of new US president Donald Trump, one Chinese investor has provided a shocking example of how pervasive a problem gender inequality still is in the financial markets.
Luo Mingxiong, founder of Beijing-based venture capital firm Jingbei Investment, revealed in January that his firm refuses to invest in firms with female CEOs. “What else do women do better than men except giving birth?” he asked, illustrating that asking sensible questions was probably one part of the answer.
He doesn’t like female board members either as “it shows that [the male company CEO] can’t recruit equally excellent and ambitious male executives.” He emphasizes, nonsensically, that he holds these views “not because of any kind of prejudice’, but that “as far as I know, most investment firms in China hold a similar view”.
China has the second-highest percentage of female CEOs in the world, 2.5%, behind only the US and Canada with 3.2%, according to a 2014 report by the global consulting firm Strategy&.
The Credit Suisse Gender 3000 survey, published in September last year, shows that China is, in fact, way ahead when it comes to women chief financial officers, with 22%, compared with the global average of 14.1%. The mainland had 9.2% of its board positions filled by women at the end of 2015.
The CS research concludes that companies with more female executives in decision-making positions continue to generate stronger market returns and superior profits.
“As we re-run our dataset for 2016, we find those investors focusing on those companies where gender diversity is an important factor in their strategy continue to be rewarded with excess returns running at a CAGR of 3.5%,” the report states.
Mingxiong will take some convincing, however.
“Being an entrepreneur isn’t fair for women,” he says. “We, as male entrepreneurs, basically don’t have to spend time taking care of family and children, but which female entrepreneurs could do that?”
Those without children, or with sufficient child care in place, presumably.
He is, however, unrepentant, describing female entrepreneurs in the workplace as an attribute as negative as “dishonesty or an inability to learn”.
As initiatives such as The 30% Club in the UK gain ground, Mingxiong’s baffling observations serve as a reminder of how far there is to go.