Diversity—It ADDS UP

Not so long ago, a discussion about diversity or gender equality in the workplace would center around social awareness or corporate good citizenship.

…Then the numbers started coming in…

And slowly but surely the conversation shifted from corporate responsibility to corporate profitability.

The findings have been conclusive, extensive and global.  Here are just a few examples from the myriad of evidence supporting the correlation between diversity and improved numbers:

• A study by Michael Ferrary of France’s Skema  Business School tracked companies on the Parisian stock exchange. Over-all the CAC40 lost 34.70% of its value from 2007-12. However, during that same period, companies on the exchange with 35% or more women on their management team lost only 5.28% of their value.
• A Pepperdine University study tracked 200 Fortune 500 companies over a number of years.  According to the lead researcher, Roy Adler:  “the correlation between high-level female executives and business success has been consistent and revealing.”
• A McKinsey Report compared the top quartile of companies in terms of women on executive committees vs. no-women on executive committees.  McKinsey found that companies with women surpassed no-women committees by 41% in return on equity and by 56% in operating results.
• Over the past five years, nine Indian companies run by prominent women managers have out-performed in year-on-year growth the 30 leading firms listed on the Bombay Stock Exchange.
• According to a Catalyst Bottom Line Report, Fortune 500 companies with the greatest number of women on their boards “attained significantly higher financial performance”– 53% higher return on equity, 42% higher return on sales and 66% higher return on invested capital.

Additionally, Harvard, Wharton, the Wall Street Journal, The Financial Times and numerous other leaders in their fields have either researched this corporate reality or reported on it in detail. Why do women make such a difference? To my mind, the major reason is simple—diverse groups provide diverse points of view which make for better decision making.  Research conducted by Anita Woolley at Carnegie Mellon sums it up this way: “if a group includes more women, its collective intelligence rises.” That’s not to say women are smarter than men, but that the group itself, when diverse, becomes a smarter, more impactful one.

At WOMEN Unlimited, Inc. we are heartened by the continually growing body of quantifiable evidence that corporations need talented women at their highest levels. It inspires corporate leaders to develop effective strategies for increasing their number of C-suite female executives.  And it makes our mission of getting them there even more rewarding.

Dr. Rosina L. Racioppi
President & CEO
WOMEN Unlimited, Inc.