Better stock performance because of women in the board?
Companies with at least one woman in the boardroom outperformed the ones who are solely led by men. At least this is a result of the recently published study “Gender diversity and corporate performance” conducted by Credit Suisse Research Institute. The study analyzes the performance of 2,400 companies worldwide from the year 2005 onward. This database makes it somehow special in the research concerning gender diversity and company performance as a lot of other surveys concentrate on certain countries or continents as well as a shorter timeframe.
Interestingly differences in the stock performance seem to be not as significant in the years 2005 to 2008 – before the crisis. But when the crisis began companies with women in the board room delivered a significantly better stock performance than the ones without – by up to 26 percent. Also the returns on equity as well as the average growth were four percentage points higher for companies with female board representation.
The study states possible reasons why greater gender diversity could be correlated with better performance whilst relating to critical voices as well.
Various studies show that there is a better performance of companies with diverse teams. Anyhow it is difficult to state the causation: do the companies perform better because of the diverse teams or do companies who are performing good are more open to build up their teams in a diverse matter?
Greater diversity within a team seems to result in better self-preparation of every single team member for tasks which will be worked on in the team. Moreover a wider range of data and experience is available.
As women and men are performing differently in certain leadership competencies a mix of leadership skills because of greater gender diversity could be a reason for better performance.
As women account for the greater proportion of graduates in a lot of markets already companies who foster gender diversity have a wider pool of talents to recruit and promote their employees of.
With women in the board companies are able to reflect the consumer-decision-maker better, as a lot of buying decisions are made by women.
A greater number of women in the board improves the corporate governance performance of a company.
Women seem to be more risk averse then men what is a benefit especially in times of crisis.
The findings of the study support the companies who foster a more diverse leadership team. According to the data the number of companies with at least one female board member increased from 41 percent in 2005 to 59 percent in 2011. Anyway, the research or more precisely the reporting of it sometimes seems to tell us that one woman in the boardroom is the super weapon for a better performance. One should not loose sight of the fact that mixed leadership teams and diversity in all aspects – not only gender – as well as an inclusive working style and cooperation in the team is of importance for companies who want to ensure sustainable performance.
What’s your opinion: Do women in the boardroom cause better company performance?