Companies with mixed-gender boards perform better

Jul 17, 2013
<p>Study finds boards with more women outperform those that are exclusively male</p>

Forward-thinking directors could hold a significant advantage over their rivals as it emerges that having a board made up equally of men and women could improve a company’s performance.
 
According to recent research carried out by Thomson Reuters, companies with mixed-gender boards perform better than those with no women serving on them. The study, entitled ‘Mining the metrics of board diversity’, finds boards increasingly adding female members, and notes that indices of companies with mixed-gender boards, on aggregate, slightly outperform a reference benchmark, with those devoid of women doing noticeably worse.
 
It appears true equality is still some distance off, though, as only 17 percent of companies report having boards made up of 20 percent or more women. More positively, that figure is up 7 percent on 2008.
 
Globally speaking, there is a perceptible but gradual shift toward having women serve on boards: 59 percent of companies worldwide report having female board members, up from 56 percent in 2008. Companies in the technology, industrials and non-cyclical goods & services sectors have the most gender-diverse boards, according to the study, while those in healthcare are the most imbalanced.
 
‘Over the past five years, significant measures have been put into place to help increase equal opportunity and diversity,’ says André Chanavat, product manager for ESG matters at Thomson Reuters. ‘But while there has been a gradual increase in the percentage of companies that have women on their boards, there is still a long way to go.’

The study suggests, however, that it is neither recent media-related controversies nor a sense of morality that prompts companies to improve their gender diversity, but rather tightening local legal requirements.

Sixty-six percent of the companies questioned have now adopted policies or processes to promote gender diversity, an increase on the 64 percent reported in 2008 and a figure that is particularly high in the Americas.

At the same time, it seems having a more balanced board could reap financial rewards. ‘The study suggests the performance of companies with mixed boards matched or even slightly outperformed companies with boards composed solely of men,’ Chanavat adds. ‘This further reinforces the idea that gender equality in the workplace makes good investment and business sense.’

The study examined 4,100 public companies globally, using data from Thomson Reuters’s ASSET4 system, which otherwise provides ESG data. 

Sign up to get stories direct to your inbox
logo-black logo-black
Loading