Business case for diversity

Improvements with Increased DiversityBusiness Case
Improving performance
  • 50% higher profitability where women make up at least 15% of senior managers compared to less than 10%.(1) 
  • 21% more likely to achieve above-average profitability if companies are in the top quartile for diversity on their executive teams. (2) 
  • 5% excess annual returns in companies with at least one female director compared to an all-male board. (3) 
  • Higher return on capital: 66% for companies with the most women on a board compared to the least. (4) 
 
 Better decision making
  • Different perspectives and experiences prevent “group think” and bring new thinking (5), essential for the energy transition.
  • Companies with above average diversity on their management teams report 19% higher innovation revenue.(6) 
 
 Accessing the widest talent pool
  • 50% potential loss of talent pool by not having women. (5)
  • Companies are seen less attractive to people to join and leads to lower employee’s satisfaction. (7)
 
Being more responsive to the market/consumers
  • Women drive 70-80% of all consumer purchasing; leadership representing women could lead to more market orientation.
 
Achieving better corporate governance and ethics
  • Women’s board representation is positively associated with CSR and social reputation. (8) 
  • Just one female on the board cuts the risk of going bust by 20%. (9)

 

 

POWERful Women 2020 business benefits full leaflet can be downloaded here.

References

  1. Credit Suisse 2014, CS Gender 3000: Women in Senior Management https://www.credit-suisse.com/corporate/en/research/research-institute/publications.html
  2. McKinsey 2018, Delivery through Diversity https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity
  3. Credit Suisse 2016, CS Gender 3000: The Reward for Change https://www.credit-suisse.com/corporate/en/media/news/articles/media-releases/2016/09/en/csri-gender-3000.html?t=690_0.5946049839258194
  4. Catalyst 2007, The Bottom Line Corporate Performance and Women’s Representation on Boards https://www.catalyst.org/research/the-bottom-line-corporate-performance-and-womens-representation-on-boards/
  5. Women on boards 2011 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31480/11-745-women-on-boards.pdf
  6. Boston Consulting Group 2018, How Diverse Leadership Teams Boost Innovation https://www.bcg.com/en-gb/publications/2018/how-diverse-leadership-teams-boost-innovation.aspx
  7. Mckinsey 2015 http://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters
  8. Byron, K and Post, C 2016, cited in CIPD June 2018 Diversity and Inclusion at Work: Facing up to the Business Case https://www.cipd.co.uk/Images/diversity-and-inclusion-at-work_2018-facing-up-to-the-business-case-technical-report_tcm18-47062.pdf
  9. Davies Report ‘Women on Boards’ 2011, Citing research by Professor Nicholas Wilson, Leeds University Business School https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/31480/11-745-women-on-boards.pdf