Higher stock prices: the case for gender diversity

August 8, 2013

A new study from Thomson Reuters finds that companies with gender-diverse boards perform better than companies with zero women on their board. This echoes what the Center for Microfinance Leadership has known all along: that diverse perspectives lead to stronger decisions and healthier institutions, that you need both women and men’s voices at the table when designing and delivering products for women and men clients and that clients are inspired by seeing powerful women leaders in the organizations that serve them.

Much to our delight, the study, entitled “Mining the Metrics of Board Diversity,” also reveals a global trend for increasing gender diversity among corporate boards all over the world: the percentage of companies reporting women on their boards increased 3% from 2008 to 2012 (now at 59%) and that the adoption of gender diversity policies increased 2% since 2008 (now at 66%). The Americas are particularly progressive when it comes to policies and processes to promote gender diversity and equal opportunity, even without legislation. Technology, Industrials and Non-Cyclical Consumer Goods & Services companies lead the way in diversifying their boards while healthcare lags behind.

Women’s World Banking has long advocated that “what gets measured gets done” and when it comes to promoting gender diversity, a first step is tracking the number of women employed, accessing professional development opportunities and promotions, and how many women are leaving. Another analysis by Thomson Reuters released in February 2012 revealed that corporations are doing more to track employee statistics by gender which is also a step in the right direction.

While women’s representation on the board is growing, equal representation is still a hurdle. According to Thomson Reuters, “only 17% of the companies analyzed report having a board consisting of 20% or more women (13% in 2008) [and] 45% report boards of 10% or more women (39% in 2008).” The trend is clearly positive and appears to be self-perpetuating; companies that already have women on the board are increasing the number of women on them at a much faster rate than companies lacking board gender diversity. Nevertheless, there is still a lot more to go to reach 50/50.

Still, it puts a smile on our face when we hear about organizations recognizing the value of diversity for serving customers, serving the mission and the bottom line.  Read the press release here, and full report here.