Study by the National Bank Shows: More Women on the Supervisory Board Increase Company Success
"Our study empirically and causally proves that a higher proportion of women on the supervisory boards of large companies is not only ethically or socially, but above all economically sensible," the authors write in a blog post by the National Bank. Specifically, the authors show, for example, that ten percentage points more women in the body result in about one percentage point more return on equity. Similarly, "statistically significant and positive effects" were found for the companies' return on assets.
More Women on Supervisory Boards Make Companies More Stable
But other metrics are also positively influenced by a higher proportion of women on supervisory boards: In addition to increased profitability, the authors demonstrate that more women in the body result in a lower debt ratio - and thus contribute to the stability of the companies. The sustainable growth rate of the examined companies was also strengthened by a higher proportion of women. "This result is particularly relevant, as there has been little empirical evidence so far on the relationship between the Female Board Ratio (FBR) and the sustainable growth of companies," the authors explain. The study is based on a broad dataset of the largest publicly traded US companies ("S&P 500 companies") over a period of 20 years.
The results are justified in the paper by stating that women "represent a valuable strategic enrichment for the board by bringing unique skills, specialized expertise, and diverse perspectives." "These qualities are believed to strengthen corporate governance, improve the supervisory competence of the supervisory body, and increase its advisory efficiency." Also mentioned are new impulses in strategy or risk issues or better team dynamics.
The results also have macroeconomic significance: A higher proportion of women on supervisory boards "increases real GDP per capita, nominal GDP growth, gross investments, and reduces the unemployment rate." "Companies and economies should therefore actively work towards a stronger inclusion of women in top management," the study authors conclude.
(APA/Red.)
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