When a woman is at the helm of a company...
Thomson Reuters study: Companies with female directors perform better economically and share prices. The Thomson Reuters study "Mining the Metrics of Board Diversity" analyzes the impact of female board members on company performance.
Thomson Reuters has presented the results of a new study, "An Analysis of Board Diversity Indicators. The authors of the report note that over the past five years, the number of women on corporate boards has gradually increased. At the same time, organizations with a mixed board have demonstrated higher or similar economic performance compared to the MSCI World Stock Index (Morgan Stanley Capital International World), especially over the past 18 months. Companies with male boards have lower financial performance than those with women on their boards. In addition, companies of the former type have a higher tracking error rate, indicating potentially greater volatility.
Key findings of the study include:
- Economic performance of companiesThe performance of companies with mixed boards was slightly better or comparable to that of the selected MSCI World Index. Companies without a female board member performed, on average, worse than those with a female board member;
- Globally, the number of companies implementing policies and processes aimed at providing equal opportunities for men and women is increasing. This figure rose from 64% in 2008 to 66% in 2012. Companies in the Americas have made significant progress in this regard, even in the absence of relevant legislation and established quotas;
- Local legal requirements have had more impact on the implementation of policies aimed at providing equal opportunities for men and women than media discussions on the subject;
- Global trends indicate a gradual increase in the number of companies with women on their boards. The number of such companies has increased to 59%. By contrast, in 2008 there were 56%;
- Only 17% companies have a share of women on the board of directors is 20% or higher (up from 13% in 2008), and 45% companies have 10% or more (39% in 2008);
- Geographically, EMEA (Europe, the Middle East and Africa) has the most women on boards. This is closely followed by the Americas. Boards in the Asia-Pacific region are the least gender diverse;
- Analysis by sector shows that The most mixed boards of directors are represented in the technology and manufacturing sectors, as well as in the non-cyclical consumer goods and services sectors. The least heterogeneous boards are in health care organizations.
"In the past five years, the business community has made great strides in terms of giving men and women equal opportunities. However, despite the gradual increase in the number of companies with women on their boards, full equality is still a long way off," said Andre Chanavat, product manager, Thomson Reuters Environmental, Social & Governance (ESG). - The study found that the economic performance of companies with a mixed board of directors was equal to or slightly better than companies with an all-male board of directors. The findings allow us to further develop the thesis that gender equality in the workplace is a good, justifiable investment from a business perspective."
About the study "Analysis of Board Diversity Indicators"
Report is based on information from 4,100 public companies around the world. The study uses information from the Thomson Reuters ASSET4 database, which provides detailed information on companies' environmental, social and governance policies to analyze socially responsible investments (ESG data). In addition, the study raises the question of what should be done to encourage companies to invite more women to their boards of directors.
This study complements the February 2012 Thomson Reuters report "Women in the Workplace.The "Women's Leadership" report notes that corporations have become more attentive to the number of women they employ. In addition, corporations with more female executives were less affected by the panic in the financial markets and managed to avoid a significant drop in their share prices.
The Thomson Reuters ASSET4 ESG database contains detailed information on environmental, social and governance policies to analyze socially responsible investments. The ESG database contains information on more than 4,300 international companies and about 750 indicators covering all aspects of sustainability reporting.
The "Board Diversity Indicator Analysis" report is available here: http://share.thomsonreuters.com/pr_us/gender_diversity_whitepaper.pdf