Companies perform better with women on board

It’s now almost a no brainer. Having diversity in your boardroom will promote business growth and profits. Add to the reports by Mckinsey and Catalyst, index provider MSCI reported that companies having more women in board have delivered 36% more return on equity since 2010 than companies that have an all-men board. These findings will help boost investors to urge companies to have women at the executive levels for better returns.

“It seems pretty obvious to me that companies that have more women at the top are also likely to have inclusive cultures and be forward looking about the needs of their customers and threats and opportunities from competitors,” said Helena Morrissey, chief executive of Newton Investment Management, a subsidiary of BNY Mellon, and a leading activist for gender equality in the workplace, as reported by Financial Times.

MSCI analysed a sample of 1,643 companies that came under its World Benchmark and it only found great results from a gender diverse group of board in comparison with all-men group of board. The decision-making and leadership qualities rendered by women played an important role in these companies and only added to its profits and return. Companies with strong female leadership according to MSCI are those having three to four women on the executive levels or those companies having a female CEO and at least one more woman executive on the board.

Though there are many female entrepreneurs now that are given opportunities compared to earlier times but of course female executives are not even close to male executives in numbers. Data shows that Nasdaq 100 companies of US has less than 17% women at the higher level, FTSE 100 boards of UK has a greater 33% women and India Inc’s 100 companies is still reeling under 10% in terms of women representatives at the executive level.

Adding to the finding, it has also been noted by MSCI that companies having women in boardrooms are less likely to be embroiled in cases of bribery, scandals and share holder battles.

There has never come a report showing negative impacts of having women in the boardrooms. It is only based on the prejudices we have had for a long time that women were disallowed at the decision making level. But, now there is no point why companies should discriminate in terms of gender while hiring people at higher level. And not just that, even women should be more upfront about their rightful position in a company after doing all the hard work to be at the executive level.

Picture Credit- Don Maclennan