Dive Brief:
- Analytics and research firm MSCI studied more than 4,200 employers, finding that those with more women at the top had returns on equity of 10.1%, compared with 7.4% for those without, according to the Washington Post.
- The Post article adds that other research has shown similar results, but MSCI used a broader definition of "strong female leadership," this time including employers that not only had a female CEO, but also had at least one additional female board director.
- The MSCI study uncovered that employers who displayed this strong female leadership definition had higher odds of success on a more unexpected measure - "fewer instances of governance-related controversies such as cases of bribery, corruption, fraud and shareholder battles." On the flip side, employers with poor gender diversity on their boards had 24% more controversies than their country's average, between 2012 and 2015.
Dive Insight:
Despite the findings, MSCI admits it's unclear whether having women leading the company was due to cause and effect regarding better performance and lower fraud and corruption. It also could be employers with more progressive, insightful and honest business practices tend to promote and hire more female leaders, according to the Post.
Even so, the article says, continuing academic research is driving home the message that diverse groups are more likely to perform at a higher level when it comes to innovation and decision-making.
Research shows that adding women to boards as seats open up will speed up and improve issues of gender imbalance. The challenge is that more directors will have to actually let go of seats, which does not happen often.
