Want to know how increased gender diversity affects your bottom line? Here are just a few of many examples confirming that a more balanced team of decision makers can help organisations become more effective and successful.
A 2011 Catalyst study found that companies with the most women board directors outperformed those with the least on return on sales (ROS) by 16 percent and return on invested capital (ROIC) by 26 percent.
Companies with sustained high representation of women—three or more women board directors in at least four or five years—significantly outperformed those with no women board directors.
In 2007, Catalyst found that companies with more women board directors outperformed those with the least on three financial measures: return on equity (53 percent higher), return on sales (42 percent higher), and return on invested capital (66 percent higher).
In a study of more than 150 German firms over five years, researchers found that boards need a critical mass of about 30 percent women to outperform (as measured by return on equity) all-male boards. This has led to the “magic number” of about three women, based on the average board size.
Forbes found that, on average, the 26 publicly traded companies headed by women on its “2010 Power Women 100” list outperformed their industries by 15 percent and the overall market by 28 percent.
A Finish study found that large companies with women CEOs were, on average, about 10 percent more profitable than corresponding companies with men CEOs.
A study that examined more than 900,000 private limited UK companies found that even after controlling for industry- and company-specific characteristics as well as the background and experience of directors, companies with women directors had a lower risk of insolvency than other companies.
Researchers at Columbia Business School and the University of Maryland found that a higher proportion of women in senior management, not including the CEO, is associated with better firm performance, especially at organisations involved with innovation.
A field study experiment of undergraduate students in international business at the Amsterdam College of Applied Sciences found that teams with an equal mix of men and women outperformed male-dominated teams in profits and sales. Performance peaked when a team had about 55 percent women.
Source: Catalyst: Why Diversity Matters (July 2013)