Companies that invest in untapped talent and embrace different experiences and perspectives outperform country and industry group peers with the least diverse workforces. This paper analyzes women’s representation in the workforce and identifies a “sweet spot” for gender balance – finding that neither under- nor over-representation of women (or men) is optimal. Companies closest to gender parity in critical roles – such as revenue-generating, engineering, and top-paying positions – achieved a higher average return on assets of 1.6 percentage points (or 29%) annually from 2013 to 2022. Other key takeaways include lower female representation in senior levels hurts performance; glass ceilings hinder women’s advancement to top ranks; women-friendly policies may boost investment outcomes; and better disclosure and standardized metrics will help to improve understanding of financial performance linkages
Blog » Lifting Financial Performance by Investing in Women (2023)
Lifting Financial Performance by Investing in Women (2023)
Companies that invest in untapped talent and embrace different experiences and perspectives outperform country and industry group peers with the least diverse workforces. This paper analyzes women’s representation in the workforce and identifies a “sweet spot” for gender balance – finding that neither under- nor over-representation of women (or men) is optimal. Companies closest to gender parity in critical roles – such as revenue-generating, engineering, and top-paying positions – achieved a higher average return on assets of 1.6 percentage points (or 29%) annually from 2013 to 2022. Other key takeaways include lower female representation in senior levels hurts performance; glass ceilings hinder women’s advancement to top ranks; women-friendly policies may boost investment outcomes; and better disclosure and standardized metrics will help to improve understanding of financial performance linkages