Predators in the Boardroom: Relating Sexually Predatory, Discriminatory Behavior to Private Capital Performance
40 Pages Posted: 25 Oct 2018
Date Written: September 23, 2018
This paper is a study of the impact of sexually predatory and/or discriminatory behavior on the performance of venture capital and private equity funds. We contend that predatory and/or discriminatory behavior is a poor management practice resulting in organizational dysfunction and poor investment performance. We begin by introducing a Predatory Behavior Index at the scale of the fund, which we construct by establishing an order relation between different types of predatory behavior; gathering validated information from legal filings to score the index value; and computing the index value as a weighted sum from the scoring. We find statistically significant evidence that fund-level investment performance is negatively correlated with sexually predatory and/or discriminatory behavior.
Keywords: Private Capital, Venture Capital, Performance, Diversity, Predatory, Harassment
JEL Classification: G24, O35
Suggested Citation: Suggested Citation