Leadership Diversity is Good for Business
Numerous studies have examined the relationship between the number of women in management and financial performance. Results have shown that companies with more women in senior leadership roles are more likely to have better results.
An extensive 19-year study by Pepperdine University professor, Roy Adler, comparing the financial performance of 215 Fortune 500 firms to industry medians during 1980 to 1998, showed that the 25 firms with the best record of promoting women to high positions were between 18% and 69% more profitable than the median F500 firms in their industries.
A Catalyst study, tracking four-year averages from 2001 through 2004, found that Fortune 500 companies with more women board directors performed significantly higher than the companies with the least number of women board directors:
- 53% higher return on equity
- 42% higher return on sales
- 66% higher return on invested capital
A joint study by McKinsey & Company and Amazone Euro Fund, found the 89 European listed companies with the highest gender diversity in top management positions, on average, outperformed their sector in terms of:
- Return on Equity (11.4% vs. an average 10.3%, during 2003 – 2005)
- Operating Results (EBIT of 11.1% vs. 5.8%, during 2003 - 2005)
- Stock price growth (64% vs. 47%, 2005 – 2007)
A 2008 study of the French CAC 40 stock exchange index by Michel Ferrary, professor of management at the Ceram Business School, France, found that the more women there were in a company’s management, the less the share price fell in 2008.
- Sanofi - with 44.89% female managers, share price decreased 27.3%
- Sodexo – with 43.39% female managers, share price decreased 8.3%
- Danone – with 38% female managers, share price decreased 26.9%
- CAC 40 – share price decreased 42.7%
- Hermes was the only large company whose share price rose (16.8%). It had the second largest feminized management team (55%).
|“We believe…when you have an increasing amount of diversity being brought to the table… you get multiple perspectives, better thinking, and more creative thoughtful solutions for the client.”|
|Barry Salzberg, Chief Executive Officer of Deloitte, LLP|
Download the diversity statistics brochure.