Staff Reports
Companies looking to maximize profits have an easier path than spending big to corner a new market or pouring in major cash to invent a revolutionary product. Instead, they can simply ensure women have equal representation in leadership.
That’s according to a new report from BlackRock, one of the world’s largest asset managers.
To be clear, the firm’s findings don’t suggest companies should overdo it by hiring an over-representative sample of women. But companies with the lowest levels of representation for women in leadership roles typically performed worse than companies with the highest levels, according to an analysis of companies in the MSCI World Index from 2013-2022.
And topping both groups were companies in the middle quintile in terms of representation, showing there is a “sweet spot” for representation. Those diverse companies outperformed their peers in terms of return on assets by 29% per year on average. That is, companies with a significant number of men and women at the top of the company tend to perform better than companies that are skewed in either direction.
“Companies closest to parity across key roles, including revenue-producing, engineering and top-paying roles, have outperformed the companies that are furthest away from parity in these roles in terms of RoA over recent years,” read a summary of the report’s finding.
Unfortunately, women still remain underrepresented in leadership roles, meaning many companies could use more women at the top of the corporate hierarchy. BlackRock’s study confirmed that reality, finding gender imbalance decreases with each rung up the company ladder.
The report found that not only do established companies perform more optimally with better gender parity, but that women-owned startups also generate a higher return.
“Women-owned or managed hedge funds have outperformed an average hedge fund by 10.5% over the last 16 years, while a survey of more than 350 startups showed that women-owned startups delivered twice as much per dollar invested compared to those founded by men,” the report found.
Benefits can trickle down to investors in gender-balanced companies as well.
“Investing in companies that promote more women may be associated with positive stock returns. In our own analysis, we looked at women’s representation among promoted employees relative to women’s representation in the workforce overall,” the report said.
“A hypothetical long-short portfolio that maximizes the relative women’s promotions exposure generated 0.72% excess return per year (relative to the benchmarked portfolio of MSCI World Index) over the past four years.”
BlackRock, it is worth noting, has landed in the crosshairs of Florida Republicans due to its push for weighing environmental, social and governance factors in its investing. Last year, the state divested $2 billion from BlackRock to signal opposition to the firm’s social stances.
9 comments
PeterH
December 5, 2023 at 10:00 am
Corporate America has taken the lead and now it’s time for more highly qualified women in government! …….
Richard C Russell
December 5, 2023 at 10:52 am
I applaud Florida for dumping BlackRock and similar shills for the DEI B.S.
Impeach Biden
December 5, 2023 at 2:12 pm
More WOKE BS.
Women have no place in business leadership positions.
Their place is either on their knees or in the kitchen.
rick whitaker
December 5, 2023 at 2:19 pm
the comments of impeach biden and richard russell are a direct result of desantis and trump influence. beware florida, there are more of these same types in your state.
Sonja Fitch
December 6, 2023 at 10:06 am
Yahoo. Yep it is a fact! Women are proven leaders! Lol. Those wittle men are crying! Cause thems knows women are their betters! Lol.
Marvin
December 10, 2023 at 11:13 am
Just look at the women presidents of the Ivy League colleges. Great leaders…..NOT. Or the genius serving as bidens current press secretary. Not to mention the most current supreme court justice, who had no clue what a women was….
Time to stop just checking the boxes and hire the most qualified candidate…PERIOD.
rick whitaker
December 10, 2023 at 11:25 am
marvin, do you disparage your daughter, mother, aunt, grandmother, and sister for being women ? your comment sounds like you hate dems also. good luck with all that hate.
Marvin
December 10, 2023 at 6:11 pm
Wrong rick. Re-read what I wrote. And this time exercise reading comprehension. Stop putting people in positions simply because they check the right boxes. The examples I used did just that.
Hire the most qualified not the affirmative action or DEI candidate,
rick whitaker
December 10, 2023 at 7:44 pm
marvin, i re-read your comment and it read the same. a few points came to mind. my research found that judge jackson was extremely qualified, much more than cavanaugh. the qualification of a press secretary is a subjective choice by design. if you hired a press secretary the qualification is finding someone that says what you want the way you want it said. college presidents are usually a political hire or connected to a big donor. then you said hire the most qualified, again subjective. who decides who’s most qualified, you. iv’e hired a lot of people in the 30 years that i had my own company. i hired the people i thought i needed for the traits i valued to make my company work the way i wanted it to. i’ve hired women, and all races and didn’t discriminate. some worked out and some didn’t, but i got better at it as time went by. the best hire i ever made was a woman. if i had had a bigger company i might had used a h&r service. the worst hires were friends, sons of friends, and people that told me how great they were. the 3 examples you gave in your post were all women. i believe in affirmative action. if it is a government job, part of the reason to hire a minority is for the big picture of making the country better. you sound like you don’t like affirmative action. what are your qualifications for coming up with that conclusion ? do you have a degree in political science, human resource management, business , or psychology? i’m wondering what makes you an expert in hiring. my field of formal study is behavioral science. also i have a degree in electronics. my company was a r. e. o. services vender. i may not be as erudite as you, but who knows. hire the most qualified, what a joke. would you hire a guy like trump or desantis to run the country? hillary clinton was way more qualified to be president, but trump got the job with the help of facebook in my opinion. i would bet that you voted for trump, the most unqualified candidate. am i wrong?
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