management diversity; corporate boards; women on boards; women in management; CS3000

Q.E.D. A More Diverse Group Results in Better Corporate Performance

“Greater diversity in boards and management are empirically associated with higher returns on equity, higher price/book valuations and superior stock price performance,” this from the Credit Suisse Research Institute which analyzed 28,000 executives across 3,000 companies.   The study, The Credit Suisse Gender 3000: Women in Senior Management, measures the benefits of diversity to all stakeholders including corporates, investors and the wider environment.
 
Findings include:
 
·         One beats none.  Companies with at least one woman on their board outperform those with none.
 
·         Diverse boards outperform.  Companies with more than one woman on their board have returned a compound 3.7% excess a year over those that have none.
 
The study is notable too for its qualitative insights:
 
·         Understanding Causality   The study is clear to disavow conclusions about cause and effect.  Do better companies hire more women; do women choose to work for more successful companies; or do women themselves improve companies' performance?  “The most likely answer is all three.”
 

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