Organizational performance is more scrutinized than ever. According to the National Association of Corporate Directors, companies with diverse boards have broader market vision
and better corporate reputations. A
research report published in Corporate Governance sites several positive
results associate with woman on boards, including improved financial
performance, improved governance, greater board independence and stronger
commitment to social responsibility.
The report goes on to say “Diversity in the boardroom isn’t an
egalitarian issue; it is a performance issue” and presents irrefutable data
showing that companies female directors outperform those with all-male boards
by more than six points. The report presents
data showing that companies with three or more female board members generated
an average RoE of 16%, well above the 9% generate by all male boards. When looking at the data from a Return on
Sales perspective, diverse boards generated a 17% return vs. a 10% for all male
boards. Perhaps most important, diverse
boards generated a 10% Return on Capital Invested, more than double the 4.7%
generated by all male boards. Incredible!
Given
the overwhelming data, we wonder what the hold-up is? We emplore companies everywhere to implement
diversity policies so society can benefit from the value created by diversity
at the board level.
