Hiring women bosses pays off, indexes show
- Bloomberg’s Functions for the Markets has found that women in leadership roles correlates with higher rates on returns. The 25% of Asian-Pacific companies with the most female executives had an average return rate of 4.6% on assets, compared with 3.7% for the 25% of companies with the least number of female executives.
- The numbers show that promoting women is good for a company's financial health, as well as the ethical thing to do, says Bloomberg. Interest in promoting women is a growing trend among investors.
- The Japan Empowering Women Index showed similar positive financial results. Bloomberg’s Financial Services Gender-Equity Index is showing twice the rate of return as the S&P 500 so far this year, it says.
A MSCI ESG study showed that companies whose boards have female directors had a 10.1% return on equity, compared to 7.4% for companies with no women directors. A Credit Suisse survey showed similar outcomes, suggesting the numbers were driven by the fact that boards with women directors are likely more focused on diversity and have less trouble finding talent.
Hiring and promoting women requires knowing what they're looking for in their careers. InHerSight, an organization that helps women locate and improve work opportunities, cites the top five factors that appeal to women as: paid time off (90%), satisfying salary (89%), exceptional coworkers (89%), equal opportunities for men and women (85%) and flexible work hours (81%).
Improving diversity generally requires an employer to consider the myriad of ways bias can impact company functions, from recruiting to compensation to management style. To become truly inclusive, organizations must take a hard look at their processes and ensure they have screened out as much bias as possible.