Positive impact of women on boards

December, 2016 Print


Having three women on a corporate board represents a tipping point in terms of influence and leads to better performance, according to research from data provider MSCI.

MSCI found that global companies with strong female leadership enjoyed a return on equity of 10.1% in 2015, versus 7.4% for those without such leadership, although it said a causal link was not established. In addition, it looked at US companies over the period from 2011 to 2016 and found that companies with at least three women on the board experienced median gains on return on equity of 10% and earnings per share of 37%. In a report, MSCI commented: “Such superior performance from companies with at least three female board members may derive from better decision-making by a more diverse group of directors, as some studies hypothesise. But outperformance may also be tied to greater gender diversity among senior leadership and the rest of the workforce, which historically has correlated with reduced turnover and higher employee engagement.”

Globally, MSCI said that women held 15.8% of board seats in September 2016, up from 15% last year. In developed world companies, this rose to 19.1% and 20.3% at US companies. Female directors held only 9% of board seats in the MSCI emerging market index constituents. The highest percentages of board seats filled by women are in Norway, with 39.4%, France, with 37.6%, and Sweden, with 35.6%.


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