From Inside Investor Relations －”Boards with female presence have better corporate governance and mix of leadership skills”
Companies with at least one woman on the board of directors outperformed companies with all-male boards for the past six years in share price gains, according to a report by the Credit Suisse Research Institute.
Companies with a market capitalization exceeding $10 bn with mixed-gender boards outperformed those with all-male boards by an average 26 percent over the past six years, based on a like-for-like comparison, according to the study of more than 2,400 companies.
For stocks with a market cap of less than $10 bn, mixed-gender boards outperformed all-male boards by 17 percent. The study concludes that the advantage of mixed-gender boards became clearer in the tougher markets since 2008 and had minimal impact in 2007 and earlier.
‘Stocks with greater gender diversity on their boards generally look defensive: they tend to perform best when markets are falling, deliver higher-than-average returns on equity through the cycle, exhibit less volatility in earnings and typically have lower gearing ratios,’ Credit Suisse analysts write in a note explaining the study.
‘Almost all of the outperformance in the back-test has been delivered post-2008, as the macro environment deteriorated and volatility increased.’
Stocks with females on the board also showed a 16 percent return on equity, compared with 12 percent for all-male boards, the report adds. Net income growth for stocks with mixed-gender boards was 14 percent over the six years, compared with 10 percent for single-gender boards.
The report concludes that the enhanced performance of mixed-gender boards could stem partly from improved corporate governance in relation to all-male boards and partly from a better understanding of women as consumers.
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