Don’t ignore the evidence
More women in the boardroom = better business performance
The evidence supporting the business case for more women on boards is overwhelming. From McKinsey to Reuters to universities, across industries and in countries all around the world, well-validated research reveals a direct correlation between women in the boardroom and improved financial performance.
Here are some of the highlights:
In our High achievers report, we documented various studies by other organizations into the direct correlation between better gender balance and improvements in:
- Organizational excellence — In a study of 101 large corporations, companies with three or more women in senior management functions scored higher than companies with no women at the top on nine criteria of organizational excellence, including key factors such as leadership, accountability and innovation. (Source: McKinsey & Company)
- Quality — Data on the top 1,500 US firms from 1992 to 2006 shows a strong correlation between firm quality as measured by Tobin’s Q (the market value of a company divided by the replacement value of its assets) and female participation in senior management. (Source: Columbia University, University of Maryland)
- Innovation — A comprehensive study of 1,000 international teams found that innovation was positively correlated with an equal gender ratio within work teams and negatively correlated with an unequal ratio. (Source: London Business School)
Interestingly, we found that all-male boards are less likely to renew and diversify. Our report Diversity drives diversity revealed that only 57% of US boards added a new director between 2011 and 2013, compared to 82% for companies with at least one female director. Only 77% added a new director between 2009 and 2013, versus 94% for companies with at least one female director.
The benefits of gender-balanced boardrooms to P&U are clear: but our Index results suggest the sector is far from achieving it.
Read related articles from the Index of women in power and utilities.