| Study of 353
Fortune 500 Companies Connects
Corporate Performance and Gender Diversity
NEW YORK, NEW YORK— A new study released by Catalyst
demonstrates that companies with a higher representation of
women in senior management positions financially outperform
companies with proportionally fewer women at the top. These
findings support the business case for diversity, which asserts
companies that recruit, retain, and advance women will have
a competitive advantage in the global marketplace.
In the study The Bottom Line: Connecting Corporate Performance
and Gender Diversity, sponsored by BMO Financial Group, Catalyst
used two measures to examine financial performance: Return
on Equity (ROE) and Total Return to Shareholders (TRS). After
examining the 353 companies that remained on the F500 list
for four out of five years between 1996 and 2000, Catalyst
found:
The group of companies with the highest representation of
women on their senior management teams had a 35-percent higher
ROE and a 34-percent higher TRS than companies with the lowest
women's representation.
Consumer Discretionary, Consumer Staples, and Financial Services
companies with the highest representation of women in senior
management experienced a considerably higher ROE and TRS than
companies with the lowest representation of women.
“Business leaders increasingly request hard data to
support the link between gender diversity and corporate performance.
This study gives business leaders unquestionable evidence
that a link does exist,” said Catalyst President Ilene
H. Lang. “We controlled for industry and company differences
and the conclusion was still the same. Top-performing companies
have a higher representation of women on their leadership
teams.”
“The Catalyst study confirms my own long-held conviction
that it makes the best of business sense to have a diverse
workforce and an equitable, supportive workplace,” said
Tony Comper, Chairman and CEO of BMO Financial Group, sole
sponsor of the research.
A Note on Methodology
Catalyst divided the 353 companies into four roughly equal
quartiles based on the representation of women in senior management.
The top quartile is the 88 companies with the highest gender
diversity on leadership teams. The bottom quartile is the
89 companies with the lowest gender diversity. Catalyst then
compared the two groups based on overall ROE and TRS.
“It is important to realize that our findings demonstrate
a link between women's leadership and financial performance,
but not causation,” said Susan Black, Catalyst Vice
President of Canada and Research and Information Services.
“There are many variables that can contribute to outstanding
financial performance, but clearly, companies that understand
the competitive advantage of gender diversity are smart enough
to leverage that diversity.”
About Catalyst
Catalyst is the leading research and advisory organization
working to advance women in business, with offices in New
York, San Jose, and Toronto. As an independent, not-for-profit
membership organization, Catalyst uses a solutions-oriented
approach that has earned the confidence of business leaders
around the world. Catalyst conducts research on all aspects
of women's career advancement and provides strategic and web-based
consulting services on a global basis to help companies and
firms advance women and build inclusive work environments.
In addition, we honor exemplary business initiatives that
promote women's leadership with our annual Catalyst Award.
Catalyst is consistently ranked No. 1 among U.S. nonprofits
focused on women's issues by The American Institute of Philanthropy.
www.catalystwomen.org
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