How Gender Diversity Improves Company Performance

1st Sep 2012

Beacon women applaud Credit Suisse for their report on Gender Diversity and Corporate performance that was published in August. It tackles one of the most hotly debated topics when speaking to companies about gender diversity and that is...

Does it REALLY positively impact the bottom line?

And ...the answer is resounding YES , as one of the most interesting findings of the report is that in terms of share price performance ,companies with at least one woman on the board have outperformed those with no women on the board by 26% from 2005-2011.

Although the issue of equality and fairness in the workplace is an important one, the focus in this report is on gender diversity and improved company performance.

This comprehensive study of 2,360 companies globally found that after the financial crisis in 2008 in a time of great economic stress the companies with women on the board performed better.

This was not the case when economic growth was high with little difference in share price performance between companies with and without board women.

Research from John Coates at Cambridge University shows that testosterone levels increase with success along with a higher tolerance for risk .The addition of more women into decision making therefore adds more balance and reduced risk taking.

The report then goes on to site seven reasons why gender diversity is linked to improved corporate performance.

1. The appointment of more women sends a signal to the market that a company is performing well as research shows that larger companies are more likely to promote women.

2. Diverse groups perform better than homogenous ones with majorities working harder when a minority is introduced. Or put another way –women and men like to impress each other.

In addition the more `social sensitivity` within a group (a typically female trait) the more likely it is that all group members will contribute which increases diversity of input and therefore productivity.

3. The addition of women introduces a better mix of leadership skills.

`In Women Matter 2` in 2008 Mckinsey talk about nine leadership criteria that define good leadership ,with women displaying five of these nine more frequently than men.

4. There are, on average more female than male graduates so gender diversity in companies gives access to a wider talent pool.

5. Women make the majority of household spending decisions so female representation on the board enhances the understanding of consumers.

6. Boards with three or more women are better at corporate governance according to a study of Canadian companies by Brown and Anastasopoulos in 2002.

7.Having at least one female director on the board reduces companies likelihood to become bankrupt by 20% according to a Leeds University report as women are more risk adverse than men.

 

So, there you have it- more women is better for business

And how do you have more women in your business?

Speak to us at Beacon Women we provide solutions to your gender agenda.

www.beaconwomen.com 



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How Gender Diversity Improves Company Performance