According to a new survey from Catalyst, a research and advisory organization that promotes the advancement of women in business, companies with a higher representation of women in senior management positions financially outperform companies with proportionally fewer women at the top.

In the study, sponsored by BMO Financial Group, Catalyst examined two measures of financial performance: return on equity (ROE) and total return to shareholders (TRS).

Catalyst divided the 353 companies that remained on the Fortune 500 list for four out of five years between 1996 and 2000 into roughly equal quartiles, based on the representation of women in senior management. The research organization found that companies in the quartile with the highest representation of women in senior management had a 35 percent higher ROE and a 34 percent higher TRS than companies in the lowest quartile. The difference in performance was especially noticeable in the consumer discretionary, consumer staples, and financial services industries.

“Business leaders increasingly request hard data to support the link between gender diversity and corporate performance. This study gives business leaders unquestionable evidence that a link does exist,” said Catalyst president Ilene H. Lang. “We controlled for industry and company differences and the conclusion was still the same,” added Lang. “Top-performing companies have a higher representation of women on their leadership teams.”

Leave a Reply

Your email address will not be published. Required fields are marked *