Having more women on boards, in senior management and across organisations makes good business sense.
This report details a collection of arguments and evidence from globally recognised and respected sources supporting why having more women on boards and in senior management benefits organisations.
Excerpt from the report:
Companies with more women in senior management score more highly on organisational criteria than companies with no women at the top.
A McKinsey study found that companies with three or more women in senior management functions score more highly, on average, on organisational criteria (such as leadership, direction, accountability, coordination and control, innovation, external orientation, capability, motivation, work environment) than companies with no women at the top. [‘Women Matter: Women at the top of corporations: Making it happen’, McKinsey & Company, 2010.]
Companies with more women on their boards have been shown to financially outperform companies that have no women on their boards.
Research by McKinsey has demonstrated a link between diversity of company boards (defined as number of women and foreign nationals) and financial performance. In a study of 180 companies across Europe, the UK and the US, in the period 2008-10, research found that for companies ranking in the top quartile of executive-board diversity, ROEs were 53 percent higher, on average, than they were for those in the bottom quartile. At the same time, EBIT margins at the most diverse companies were 14 percent higher, on average, than those of the least diverse companies. [‘McKinsey Quarterly: Is there a payoff from top-team diversity?’, McKinsey & Company, April 2012.]
In a separate study of listed European and BRIC companies in the period 2007-09, McKinsey found that companies with the highest share of women outperform companies with no women: by 41 percent in terms of return on equity, and by 56 percent in terms of EBIT. [‘Women Matter: Women at the top of corporations: Making it happen’, McKinsey & Company, 2010.]
A Catalyst study of Fortune 500 companies across a four-to-five year period found a connection between gender diversity on boards and financial performance. The study found that companies with the most women board directors outperform those with the least on return on sales (ROS) by 16 percent and on return on invested capital (ROIC) by 26 percent. The study also found that companies with sustained high representation of women board directors, defined as those with three or more in at least four of five years, significantly outperformed those with sustained low representation by 84 percent on ROS, by 60 percent on ROIC, and by 46 percent on return on equity. [‘The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004-2008)’, Catalyst, 2011.]
Credit Suisse analyzed almost 2,400 companies and found that companies with more than one woman on the board have outperformed those with no women on the board by 26 percent since 2005. [‘Gender diversity and corporate performance’, Credit Suisse, 2012.]