Knowledge Center

The business case for gender diversity asserts that organizations that develop and advance women will benefit for a number of reasons. Specifically, they will access a large part of the available talent pool, as well as employ individuals who reflect a substantial part of their consumer base. This study sets out to determine whether there is a link between gender diversity and corporate financial performance.

Although research has been conducted into whether there is a link between gender diversity and corporate financial performance, no firm link has been established between gender diversity on top leadership teams and financial performance.

Our findings show:

  • Companies with the highest representation of women on their top management teams experienced better financial performance than companies with the lowest women’s representation.

  • This finding holds for both financial measures analyzed: Return on Equity (ROE), which is 35 percent higher, and Total Return to Shareholders (TRS), which is 34 percent higher.

  • In each of the five industries analyzed, the companies with the highest women’s representation on their top management teams experienced a higher ROE than the companies with the lowest women’s representation.

  • In four out of five industries, the companies with the highest women’s representation on their top management teams experienced a higher TRS than the companies with the lowest women’s representation.

Sponsor: BMO Financial Group