Gender diversity does have an impact on performance, according to a report from Eaton Vance.
The report “Evaluating the financial materiality of gender diversity factors” found that board-level gender diversity was associated with better return on equity.
US large-cap companies with at least four women on corporate boards and US small-cap and non-US companies with at least two women on their board were shown to outperform those with fewer.
“Some studies we examined showed that a more gender diverse executive team has a stronger impact on company performance than the gender of the CEO,” said Yijia Chen, ESG quantitative research analyst at Eaton Vance affiliate Calvert Research and Management.
“Other studies linked diverse boards and executive teams to better risk management and, in some cases, improved performance results.”
The study examined five factors, including number and percentage of female board members, number of women in board leadership roles, number of women named executive officers, and a circumstantial score related to the number of positive and negative news stories about diversity and inclusion.
Large-cap US companies with a higher circumstantial score were also more likely to have better return on equity than those with a lower score.
Utilities had the largest number of women on corporate boards and in leadership roles, while energy was the sector with the lowest levels of female representation.
“On the whole, our comprehensive, backtested research confirms the findings of prior studies citing the impact of gender diversity on corporate financial performance,” said Ms Chen.
“The research showed that gender diversity can have a significant impact on equity returns.”
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