The benefits of having women in corporate leadership positions span further than simply reaching quotas or maintaining the illusion of diversity for companies. A 2015 MSCI report includes evidence that companies with women on their boards achieve more profitability, fewer governance-related controversies and better decision-making practices than those with boards that lack female leadership.
MSCI found that companies in the MSCI World Index with strong woman leadership generated a Return on Equity of 10.1% per year, compared to the 7.4% companies without gender-diverse leadership generate.
In addition, companies that had women in leadership positions experienced fewer conflicts relating to governance than the average. Relatedly, the report found when women are in power, the entire board tends to be more diverse. Globally as of 2015, 59.9% of MSCI’s Global Index companies with women as CEOs had at least three women on their boards, compared to 30% of companies with men as CEOs.
Evidence shows diversity leads to better problem solving. The report cites a study that showed a more diverse, randomly-selected group of problem-solvers outperformed a more homogenous group of high ability problem-solvers. The more complicated the task that involved collaboration by group members, the more profound the effect of diversity.
Women comprised forty-five percent of Fair360, formerly DiversityInc’s 2019 Top 10 management positions. They made up 35% of senior management positions, including women of color making up 8%. In Fair360, formerly DiversityInc’s Top 10, women made up 34.2% of the boards of directors, and women of color made up 10.3%. For the Top 50, 29.5% of people on boards were women, and 8% were women of color.
These numbers are on track with the goal MSCI cited in 2015 to have women make up 30% of leadership boards worldwide. Data showed that while U.S. companies have fewer women on boards than European companies, American companies are more likely to have women as CEOs or CFOs.
MSCI’s 2015 data showed women comprised 18.1% of its World Index directorships, up from the 15.9% recorded in 2015. MSCI reported that if companies continued with “business as usual,” corporations would not meet the 30% goal until 2027.
Fair360, formerly DiversityInc’s more recent 2018 statistics for companies in the U.S., women made up 22.5% of Fortune 500 company boards. Only 4.6% were women of color. The 2020 Women on Boards organization began in 2010 to raise the percentage of women on boards in the U.S. to 20% by 2020.
Fair360, formerly DiversityInc’s Top 10 and Top 50 Companies for Diversity surpass all of these figures.
