A one-liner on LinkedIn from the head of Norway’s sovereign wealth fund endorsing a BlackRock report about gender diversity has drawn sharp criticism from a top financial academic for spreading misinformation.
The BlackRock report was about how gender diversity can boost companies’ economic output.
Alex Edmans, professor of finance at the London Business School, on Saturday reposted an item by Nicolai Tangen, chief executive officer of Norges Bank Investment Management (NBIM), in which the latter published a link to the BlackRock report, saying: “Better, gender balance means more money! Now proven!”
In his repost, Edmans wrote: “Unfortunately the BlackRock report doesn’t even contain facts, let alone data, evidence, or proof.
“The post below makes several steps up the Ladder of Misinference because even very discerning organisations, who have written excellent position papers based on rigorous evidence, can suffer from confirmation bias,” he said.
Edmans runs a website entitled ‘May Contain Lies’ and published a link to his analysis on there of what he called “serious flaws” in the BlackRock report.
BlackRock’s new report, “Lifting financial performance by investing in women”, makes a number of claims, including that companies with the most even gender balance in roles driving revenue generation have outperformed those with a greater imbalance, on the return-on-assets measure.
“If you’re a public person, you should not share stuff without vetting it yourself.”
Alex Edmans, professor of finance at the London Business School
In a blog on 2 November, the day the BlackRock report came out and was covered as news in outlets such as the Financial Times, Edmans wrote that there was “almost nothing” readers could take away from the study.
“The study makes fundamental errors, such as using dubious measures of financial performance (and switching between them, perhaps cherry-picking the ones that work), using dubious measures of gender diversity (and switching between them), and omitting basic controls,” he wrote.
“We appreciate that Alex Edmans takes the time to elaborate and debate on the issue”
Nicolai Tangen, CEO of Norges Bank Investment Management
Asked by IPE whether it mattered what Tangen, who has 141,300 followers on LinkedIn, had said in a short post, Edmans said: “If you’re a public person, you should not share stuff without vetting it yourself.
“And what is surprising to me is that NBIM is an extremely thoughtful organisation so their position papers on their website are about complicated issues, they are really researched and they’re really in-depth.
“For him to just basically shoot from the hip and endorse something just because he likes it, using the word “proven” when it’s not even close to that, is just not responsible,” Edmans said.
“You spread misinformation, and this then makes the diversity case even weaker,” he said.
“I’m a big proponent of diversity, but anti-diversity will say – look, your diversity case is so weak, because you have people latching onto really bad research and sharing it because they want it to be true. This is not good,” he continued.
IPE asked Tangen, whose organisation runs the NOK15.6trn (€1.3trn) Government Pension Fund Global (GPFG), for a response to Edmans’ criticism on LinkedIn.
Tangen said: “I acknowledge that the report was shared with a tabloid statement, but maybe that is what is needed to spark a debate about this important issue.
“We appreciate that Alex Edmans takes the time to elaborate and debate on the issue,” the NBIM CEO told IPE.
IPE has also requested comment from BlackRock.
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