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New research finds companies perform better with women on the board

More women on boards = better results for the company?

New research finds companies perform better with women on the board

New research by the Centre for Gender Economics and Innovation and Infinitas Asset Management says that companies with women on their boards perform better than those who don’t.

The research, published by The Sydney Morning Herald, says that gender-diverse boards performed an average of 2 per cent better per year than ASX200 companies generally. They performed more than 7 per cent better per year than companies with no women on their boards.

The group analysed ASX200 companies to conclude that since 2010, investors would have a better return in companies that had at least one-quarter female boards, compared with those with less gender-diverse and all-male boards.

However women remain an infrequent presence on company boards and at executive level. Even more gallingly, female executives and CEO’s are paid less than their male counterparts. 

As of March 2015, there were 63 companies that met the 25 per cent threshold, up from 15 in mid-2010.

As Susanne Moore, the chairwoman of the Centre for Gender Economics and Innocation says, it makes sense to increase the number of women on boards – not just for the sake of financial success, but for promoting diverse opinions and challenging the stereotype that women are a ‘cost’ to a business due to maternity leave and flexibility.

“Common sense would tell you that if you have a more diverse group sitting at the decision-making table, then you’re going to get more diverse ideas,” she told The Sydney Morning Herald. 

This new research fits in with findings out of the US that companies due better when at least three women sit on the board.

Charlotte Laurent-Ottomane, of the Thirty Percent Coalition, an American lobbying group devoted to having women fill thirty per cent of U.S. board seats by 2015, told The New Yorker last year that “ companies start to see better corporate governance when at least three women sit on their boards—which amounts to thirty per cent on a ten-person board. “

“With that critical mass”, she told the magazine, “female board members are more likely to speak out, pose challenging questions, and encourage the entire group to become more collaborative and less hierarchical.”

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