Gender diversity shows mixed financial results

Zubin Jelveh reports here:

In looking at 2,260 management teams between 1996 to 2003, they found that mixed-gender groups underperformed all male groups by a little over 1 percent per year. On the other hand, they did find that differences in education and work history did seem to improve group performance (1.15 percent per year).

The reason? The researchers suggest that while diversity increases the total pool of information and experience the group can tap, in gender diverse groups that benefit can be sunk by the increased communication costs between men and women (especially if the gender makeup is lopsided, as it's likely to be in the male dominated mutual fund industry).

UPDATE: Our own Caitlin Liu reports on a related study showing an opposite gender effect: "Large corporations with the highest representation of women board members significantly outperformed those with the highest concentration of men."

My hypothesis is that gender diversity works well in staff and committee groups, but poorly in operations, line jobs and time-sensitive teams. Musical theater is the only exception that comes to mind at this moment, although attractive saleswomen selling to meatheads is a corollary of sorts.