Female leaders are making their mark in the corporate world as they are proving to bring stronger financial returns than their male counterparts.
In a review conducted by MSCI ESG Research, statistics showed that as of September 2015, companies with a strong female leadership presence generated a better equity return than those without. These findings are similar to what Credit Suisse analysts reported in 2014, when their research team identified and mapped more than 28,000 senior managers at over 3,000 companies across 40 countries.
Board diversity has a positive impact on performance, as women have a lot to bring to the table. Diana Bilimoria, Chair of Organizational Behavior at Case Western Reserve University’s Weatherhead School of Management, is an expert on women in leadership and also an advocate for having more female leaders in organizations. She recently reported that research has shown “a correlation between the presence of women in top governance and leadership roles and organizational performance, philanthropy, and corporate social responsibility.” The interest in gender diversity of boards has shown improvement in recent years because of the positive impact that female leaders have on corporate performance; however, female CEOs still fall in the minority.
Of the 4,200 companies in MSCI’s global directors reference universe, 3,343 new board seats opened up each year between December 2009 and August 2015. Only 16.0% of these vacancies were filled by women directors. This shows that women still climb the corporate ladder much slower than men even though they are just as capable.
Fortunately, industry thought leaders are helping with this cause. They include senior business executives, national women’s organizations, institutional investors, corporate governance experts, and board members.
One core group in spurring advancement is The 30% Club, which was launched in the UK in 2010. This group advocated to have females represent at least 30% of board seats by 2015. It targeted 160 companies in the S&P 500 and Russell 1000 with no women on their boards. Although The 30% Club has not yet met its goal in board gender diversity, 22 new companies have women on their boards as a result of their efforts. Unfortunately, based on MSCI’s findings, it looks like the 30% goal is not likely to be met until 2027, unless certain strategies are put in place.
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