Tyche Leadership Consulting_Credit Suisse report: Women in Senior Management improves financial performance.

Credit Suisse report: Women in Senior Management improves financial performance.

A new Credit Suisse Research Institute study called ‘CS Gender 3000: Women in Senior Management’ presents the financial evidence, looks at which regions and sectors show higher diversity levels and analyses the obstacles to female participation in the workplace.

The report finds that companies with more women on the board of directors had higher returns on equity, better stock performance, and higher payouts of dividends. Researchers examined 28,000 executives at 3,000 companies in 40 countries, known as the “Gender 3000 database”.  They find that companies with 50% or more of the key “front office” positions, such as CEO, operations chiefs, finance and strategy heads were held by women had an average annual returns of 28.7 percent, compared to 19.1 percent in all companies. The rate was 22.8 % for those companies, where a quarter of the top jobs were held by women, and 25.6 % where at least one third of the leadership roles were held by women.

Our research team has undertaken the unique and significant exercise of identifying and mapping more than 28,000 senior managers at over 3,000 companies actively covered by Credit Suisse analysts worldwide – The Credit Suisse Gender 3000. This enables a deeper analysis of diversity and its impact at a new day-to-day operational level rather than just the supervisory benefits of the boardroom. As much as the proportion of women in senior management, we can examine the nature of the roles women fulfill by country and by sector.
Some of the findings of our initial report are confirmed – greater diversity in boards and management are empirically associated with higher returns on equity, higher price/book valuations and superior stock price performance. However, new findings emerge from this added management analysis – we find no evidence that female led companies reflect greater financial conservatism where leverage is concerned. Also, dividend payout ratios have been shown to be higher. Female CEOs have proven to be less acquisitive than men when assuming the leadership position. The analysis makes no claims to causality though the results are striking. – Urs Rohner , Chairman, Credit Suisse