BETTER BOTTOM LINE
Two organizations have delivered the first studies suggesting a link between gender balance and performance, Catalyst, the US research organisation and McKinsey & Company. Taking very different approaches to the data, they both came up with very similar results: that having more women in leadership is correlated with stronger financial returns. (And they are not the only ones to show the link. Besides another study of North American companies, similar proof is available for France and Vietnam, among others.
CATALYST REPORT: Linking Performance and Gender Balance on the Board
RETURN ON EQUITY: Fortune 500 companies with 3 or more women on the Board gain a significant performance advantage over those with the fewest
- + 73% return on sales
- + 83% return on equity
- + 112% return on invested capital
Read Catalyst research report
McKINSEY REPORT: Women Matter: Women at the top of corporations
Similar findings come from the McKinsey Report, which has found that companies with the highest percentage of women show the best performance. In comparing the top-quartile of companies in terms of share of women in executive committees against companies that have all-male executive committees, McKinsey found that the former companies exceeded the latter by 41% in return on equity and by 56% in operating results.
Read the full study
How (and How Much) Women Help
Three Women Tipping Point
Two studies have shown that companies with significant numbers of top female managers do better, both in terms of such organizational aspects as innovation and accountability and also in terms of profit, relative to sector competitors. The tipping point is the key: At three members of the board, the benefits of women start to make a real difference. But which comes first: the relatively large number of leading women or the type of corporate culture that facilitates a broader leadership? Well, argues a VP at the source of one of the studies, does it matter?
Pepperdine University Finds Link Between Women and Corporate Performance
Pepperdine University Finds Link Between Women and Corporate Performance
After years of tracking the performance of about 200 of the Fortune 500 companies (those that provide a gender breakdown of their executives), Roy D. Adler and his colleagues at the California school consistently found the “correlation between high-level female executives and business success has been consistent and revealing.”
Women Leaders Help French Companies Survive Crisis
New research from Prof Michel Ferrary of Ceram Business School on companies from the French CAC 40 stock exchange index showed that the more women there were in a company’s management, the less the share price fell in 2008. The only large French company to record a share price gain in 2008 was Hermès — whose management is 55% women, the second largest share among French blue chips. In general, companies with a management of at least 38% women suffered less than the CAC 40 benchmark index (though no others than Hermès posted a gain in share price, but then who did in 2008?).
Women Tend To Hold Boards To Account
New research from Prof Renée Adams professor of the University of Queensland (and Daniel Ferreira, LSE) based on data from S&P 1500 firms, shows that women are more likely to sit on monitoring-related committees and that diverse boards are more likely to hold CEOs accountable for poor stock price performance.
More Women in Top Management Improves Performance
Research from Cristian Dezső of University of Maryland and David Gaddis Ross of Columbia University, employing data on the largest 1,500 public US companies from 1992 to 2006, found that companies with one or more women in top management “just below” the CEO level perform better than other companies.
Women-Led Companies in India Perform Better
Nine Indian companies run by the most prominent women managers outperformed the 30 leading listed firms on the Bombay Stock Exchange, according to a SundayET study, in year-on-year growth rates for the last five years.
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