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File this under obvious but important (a nod to “The Week” and my favorite “boring but important” column of news): Fortune 500 companies with the highest representation of women directors attained significantly higher financial performance, on average, than those with the lowest. This according to the nonprofit group Catalyst, which released a study today on the topic. On average, they report, companies with three or more women board directors perform “notably stronger-than-average.”
This won’t come as a surprise, considering that better diversity has long been linked with better financial performance. Companies with more diverse boards, executive teams, and employees are inevitably going to create more diverse product lines and weigh problems with more varied input.
What is surprising is the rate at which women-heavy boards outperformed their mostly male counterparts on the study’s three metrics: return on equity, return on sales and return on invested capital. According to Catalyst, the comparisons are significant. On average, companies with the highest percentages of women directors outperformed those with the least by:
Return on Equity: 53 percent
Return on Sales: 42 percent
Return on Invested Capital: 66 percent
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