Research Says: Women On Boards Are Good For Business

 

Study: The Bottom Line: Corporate Performance and Women’s Representation on Boards, 2004–2008 (Nancy M. Carter, Ph.D., and Harvey M. Wagner, Ph.D., Catalyst 2011)

Finding: This update of the 2007 study finds that Fortune 500 companies with high representations of women in board leadership demonstrate increased competitiveness by out-performing those with none.

Note about The Woman Effect Research Index: This study was performed by researchers not affiliated with InPower Women. Our Research Index includes all relevant research to the subject of women, business and power. We do not influence how the research was conducted or reported by the researchers. In our abstracts, we focus on pulling out the most actionable advice for individual women. To suggest additional research we should index, or discuss our choice of abstract focus, please contact us.

InPower Insight: Create a company culture that values women’s leadership skills, and you nurture a winning and competitive company.

Summary:

catalystROS2011Women are good for business. Despite a rough economic period, Fortune 500 companies with three or more women in board positions created a competitive advantage over companies with no women on their boards in the following three areas:

  • Return on Sales: 84% advantage
  • Return on Invested Capital: 60% advantage
  • Return on Equity: 46% advantage

This study was conducted on financial results of 524 public companies, which demonstrated a sustained commitment to women in leadership, as measured by the presence of women on their boards for four of the five years analyzed. Previous studies in the series have also found a connection between gender diversity on corporate boards and financial performance. Additional findings in this report, based on a quartile analysis, also include:

  • Companies with the most women board directors (WBD) outperform those with the least on ROS by 16 percent.
  • Companies with the most WBD outperform those with the least on ROIC by 26 percent.

Career Coaching: As a high-performing job seeker and returns-motivated investor it will behoove you to look at the board’s gender diversity to determine whether the company you are considering joining forces with is competitively positioned for market success.

Keywords: competitiveness, women on boards, return on sales, return on equity, return on invested capital, catalyst, fortune 500, financial results

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