Women in senior management exhibit higher returns: Study

A recent report The CS Gender 3000: Women in Senior Management mentioned that companies which have more women participation at Board level or in top management exhibit higher returns, higher valuations and higher payout ratios. The report has included over 3,000 companies and 28,000 senior managers across 40 countries and all major sectors. Key findings of the report are as mentioned below:

Board diversity has increased among each country and every sector from 12.8% in 2013 to nearly 14.2% at the end of 2015.

Women participation in top-management (CEO and directors reporting to the CEO) stands at 13.5% at the end of 2015. Only 5% of CEOs in the CSG 3,000 are female.

The report also mentioned that share price out performance has been sustained since 2013 and there has been a 5% outperformance on a sector neutral basis by those companies with at least one woman on the board. A long term trend analysis shows that there was a compound annual excess return since a decade.

The study found that the representation of women in management positions and on the boards of companies is similar; it is qualitatively different in its makeup. The report finds some interesting facts like how women in management are concentrated in shared services and staff functions and while differences exist between sectors and countries. The report also mentioned that these roles will have less impact in management structure which 13.7% globally in 2015.

The report also mentioned that the percentage of women on boards in India has increased marginally to 8.9% in 2015 from 7.2% in 2013.

The report also highlights that the percentage of women in senior management is similar to that in the boardroom. But their roles are having less scope for moving to the most senior roles. At the end, the analysis finds that women at mid-management face lot of obstacles and require lot of policy measures to lead further progress.

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