Women on board, share prices smile


  • Business
  • Thursday, 11 Jul 2013

HONG KONG/SINGAPORE: Want your share prices to go up? Then get more women on your board of directors – or so a study by global news and information company, Thomson Reuters, suggests.

According to the study, Mining the Metrics of Board Diversity, which analysed data compiled from 4,100 public companies globally, the participation of women on boards has increased gradually over the past five years and that, on average, companies with mixed-gender boards have marginally better, or similar, performance to a benchmark index.  

On the other hand, companies with no women on their boards underperformed relative to gender-diverse boards and had slightly higher tracking errors, indicating potentially more volatility.

“This study suggests that the performance of companies with mixed boards matched or even slightly outperformed companies with boards comprised solely of men, further reinforcing the idea that gender equality in the workplace makes good investment and business sense,” says Andre Chanavat, product manager, Environmental, Social & Governance.

Current global trends indicate a gradual increase in the percentage of companies that have women on their boards with 59% of companies reporting women board members, up from 56% in 2008.

Sector trends indicate that companies within the technology, industrials and non-cyclical consumer goods and services sectors lead in having the most gender-diverse boards, while healthcare companies have the least. From a regional perspective, the Asia Pacific region reportedly has the least gender-diverse boards, whereas the EMEA (Europe, the Middle-East and Africa) has the most women on corporate boards followed closely by the Americas.

One interesting finding is that local legal requirements appear to have had a greater impact in the adoption of policies to improve gender diversity in companies, rather than media-related controversies. Legislation, it would seem, is the key driver.

“Over the past five years significant measures have been put into place to help increase equal opportunity and diversity and while there has been a gradual increase in the percentage of companies that have women on boards, there is still a long way to go,” Chavanat said. 

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women , corporate board , stocks

   

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