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Gender-diverse boards can positively impact company performance, equity returns

Research from investment management company Eaton Vance confirms previous studies showing that gender diversity at the senior levels can make a financially material difference to the success of a company.

user iconJerome Doraisamy 12 November 2019 Corporate Counsel
Eaton Vance


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In a research paper titled, “Evaluating the financial materiality of gender diversity factors”, Yijia Chen – an ESG quantitative research analyst from Eaton Vance affiliate, Calvert Research and Management – explored the financial materiality of five distinct gender-diversity factors with relatively good data coverage.

Those factors were: number of female board members, percentage of female board members, number of women in board leadership roles, number of women named executive officers and TruValue circumstantial score related to diversity and inclusion news/issues.

On the question of whether or not gender-diverse boards and executive teams really make a financially material difference to companies and capital markets, Ms Chen said: “While numerous studies in recent years point to ‘yes’, we decided to put these theories to the test, using rigorous quantitative factors.”


“Some studies we examined showed that a more gender-diverse executive team has a stronger impact on company performance than the gender of the CEO. Other studies linked diverse boards and executive teams to better risk management and, in some cases, improved performance results.”

The research found, she noted, that gender-diversity factors show strong efficacy in equity returns for both US and international markets.

“More specifically, for US large-cap companies, the TruValue circumstantial score related to gender and inclusiveness news/issues was the major driver of superior equity performance. For US small-cap companies and non-US markets, board-level gender diversity was the driving performance factor.”

Across all sectors, Ms Chen continued, “the average number of women in board leadership roles and women NEOs is less than one, which implies that most companies do not put any women in the three-to-five most important company roles, while women's voices are starting to be heard on corporate boards, their opinions are not as influential in leadership teams.”

On the whole, she concluded, the research confirms the findings of prior studies citing the impact of gender diversity on corporate financial performance.

“The research showed that gender diversity can have a significant impact on equity returns. The circumstantial score related to gender and inclusiveness news/issues is one of the major drivers of equity performance for US large-cap companies, while board-level gender diversity helped drive results for US small-cap companies and non-US markets,” she posited.

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