September 2, 2014

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.

Category: Impact

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

Original Source

Photo credit: Luke Peterson

April Sweazy (113 Posts)

April is a writer, budding artist and deep soulful woman who has spent her career protecting women in every way you can imagine (and maybe some you can’t). Read April’s posts and follow her on Google+ and Twitter.


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  1. [...] The good news is that these efforts, combined with education and encouragement, have helped put women on 15% of the boards of the Fortune 500. More good news is that studies show that companies with about 30% gender diversity on their boards actually outperform those with no women by a wide margin measured through multiple metrics (e.g., an 84% return on sales). [...]

  2. [...] The good news is that these efforts, combined with education and encouragement, have helped put women on 15% of the boards of the Fortune 500. More good news is that studies show that companies with about 30% gender diversity on their boards actually outperform those with no women by a wide margin measured through multiple metrics (e.g., an 84% return on sales). [...]

  3. [...] from McKinsey to Catalyst continually find that that companies in the US and Europe with the most women on their boards, and [...]

  4. [...] the last few years some fascinating evidence has emerged showing that companies that have achieved rough gender parity in their leadership teams perform [...]

  5. [...] the last few years some fascinating evidence has emerged showing that companies that have achieved rough gender parity in their leadership teams perform [...]

  6. [...] “…studies show that companies with about 30% gender diversity on their boards actually outperform those with no women by a wide margin measured through multiple metrics (e.g., an 84% return on sales).” [...]

  7. [...] – including women who “fail” sometimes – outperform those with no women at all by a significant margin. The American Psychological Association also finds that working moms are less depressed, bringing [...]

  8. [...] representing over 30 percent of the team in diverse business specialties – their organizations perform demonstrably better. Not only are women naturally good leaders, showing the capacity to balance their leadership [...]

  9. [...] representing over 30 percent of the team in diverse business specialties – their organizations perform demonstrably better. Not only are women naturally good leaders, showing the capacity to balance their leadership [...]

  10. [...] Fortune 500 with other women comprising at least 30% of her colleagues, her presence correlates to 84% higher return on sales, 60% return on invested capital and 46% higher return on equity with companies with no women on their [...]

  11. [...] the inspiring and educational women centric websites I mentioned in my introduction, I came across an article written by April Sweazy that offers detailed statistics on this research. Other memorable tips included: seek mentors above [...]

  12. [...] women in Congress would lead to more progress. We’ve seen it countless times in business. Adding women to the board of directors consistently correlates with positive financial results. Will the increase of female representation [...]

  13. [...] the good news side, we know that companies that have strong representation of women on boards outperform those that don’t. We also know that there are a growing number of entrepreneurs [...]

  14. […] These figures were then correlated with the number of women directors on the various boards. Once again, women on boards makes a difference to the company’s financial […]

  15. […] studies have cited that women in leadership positions deliver a higher return on sale, a higher return on […]