Good gender balance for a successful business
Publish date: 09 January 2019
Issue Number: 268
Diary: Legalbrief Workplace
Category: Equity
Gender balance can be an important signal for investors, but they may be looking for it in the wrong place. Fin24 reports that a study by Calvert Impact Capital found that diversity in senior staff had a greater impact than the number of female directors or the gender of its founder. ‘We saw a particularly strong relationship to women in leadership,’ said Leigh Moran, Calvert’s director of strategy. ‘We think there’s a common misconception that incorporating gender is solely limited to investing in women-led businesses.’ In a study of its $23bn global lending portfolio, Calvert determined that companies with the most women in senior leadership positions – the people who report directly to the CEO – delivered double the average annual return on equity over the past 11 years compared with the companies with the fewest. Calvert saw better performance when women comprised anywhere between 33 and 75% of the leadership, she said. Firms with the fewest women in senior management – 20% or less – returned on average 4.4.% per year. Those with the most – more than 57% women – returned 8.6%.
