The Importance of Gender Diversity within Executive Boards

• Gender diversity is important to corporate success.
• Gender diversity tends to correlate with the presence of effective talent management.
• Empowered women are indicators of an effective and positive work environment.

How important is gender diversity in investing? How important is gender diversity to the greater corporate world? The importance of gender diversity has been an issue in the spotlight recently. In investing, as well as many other industries, women are underrepresented in regards to holding executive positions within companies. This trend is representative of a greater societal lack in giving women the same opportunities as men. 

In order to spread awareness about the issue, MSCI ESG did a report highlighting the correlation between the gender inclusivity of executive boards and company performance. Their hypothesis was that “higher numbers of female directors could indicate a higher level of attention to talent management firm-wide.” We’ve read and summarized the report in order to spread the information. Here are the main findings:

Empowered Women are Integral to Success

First and foremost, women are undeniably important to executive boards. Having a diverse board benefits companies through having a greater pool of knowledge and skills to aid in decision-making and management. Companies with boards containing 3 or more women were 4.6 times more likely to be practicing positive talent management practices. Some examples of talent management practices are having training programs focused on leadership, degree programs, and employee wellbeing surveys. Companies that had both diverse board and positive talent management practices had significant growth in employee productivity that was well above the median level of all companies analyzed. Finally, companies with 3 or more women in their executive boards had significantly higher equity figure returns and higher dividend payouts.

How You Can Make a Difference!

The MSCI report has confirmed what many already knew to be true: having empowered women is an integral part of any successful company. Women not only better companies with their skills and expertise; they act as reliable indicators of company success and the presence of a positive work environment. At Physis Investment, we support equal gender representation and other diversity issues plaguing the current corporate world. Join today to help fight against injustice!