Companies with a higher representation of women in senior management positions financially outperform companies with proportionally fewer women at the top, according to a new study by Catalyst, a research and advisory organization working to advance women in business.
Catalyst took the 353 companies that were on the F500 list for four out of five years between 1996 and 2000 and divided them into four quartiles based on the representation of women in senior management. The top quartile and the bottom quartile were then compared on overall Return on Equity (ROE) and Total Return to Shareholders (TRS).
The study found:
The companies with the highest representation of women on their senior management teams had a 35% higher ROE and a 34% higher TRS than companies with the lowest representation of women.
Consumer discretionary, consumer staples, and financial services companies with the highest representation of women in senior management had a considerably higher ROE and TRS than companies with the lowest representation of women.
According to Catalyst president Ilene H. Lang: "We controlled for industry and company differences and the conclusion was still the same. Top-performing companies have a higher representation of women on their leadership teams."