The Tipping Point - Women on Boards and Financial Performance

categories: ESG Products & Services, Americas, EMEAI, Investing (Investment Management), Responsible Investing, Asia Pacific, Asset Owners, Hedge Funds, Equities, Research Paper, Asset Managers (Quant or Fundamental), Research Insight, RALLIS Damion, EASTMAN Meggin Thwing, MAZZUCCHELLI Gaia

A growing body of research shows that having three women on a corporate board represents a “tipping point” in terms of influence, which is reflected in financial performance. U.S. companies that began the 2011-2016 period with at least three women on the board experienced median gains in Return on Equity (ROE) of 10 percentage points and Earnings Per Share (EPS) of 37%. In contrast, companies that began the period with no female directors experienced median changes of -1 percentage point in ROE and -8% in EPS over the study period.  However, a causal link was not established.


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The Tipping Point - Women on Boards and Financial Performance