Notes:
1 Based upon the four-year average for ROE, ROS, and ROIC for 2001, 2002, 2003, and 2004, and women board director (WBD) data for 2001 and 2003. Financial data for the companies examined
were obtained from the Standard & Poor’s Compustat database. Because of movement into and out of the Fortune 500 each year, there are 520 companies in this analysis; the top quartile
comprises the 132 companies with the highest average percentage of women board directors while the bottom quartile comprises the 129 companies with the lowest average percentage of
women board directors. WBD data was obtained from the 2003 Catalyst Census of Women Board Directors and the 2001 Catalyst Census of Women Board Directors. Financial performance
measures vary by industry. To account for this variability, standardized financial performance measures were used to make comparisons within the overall sample.
2 Correlation does not prove or imply causation.
3 Return on equity (ROE): ratio of after-tax net profit to stockholders’ equity.
4 Return on sales (ROS): pre-tax net profit divided by revenue.
5 Return on invested capital (ROIC): ratio of after-tax net operating profit to invested capital.
6 Standard & Poor’s industry sectors were used. To increase the sample size, we combined the following industry sectors as follows: Consumer Discretionary (Goods, Services); Consumer
Staples (Goods, Services); Healthcare (Others, Pharmaceuticals); Industrials (Goods, Services); and Information Technology (Hardware, Software). Three industry sectors (Utilities, Energy, and
Telecommunications) were excluded because each has fewer than six companies in the top and/or bottom quartiles, precluding meaningful analysis.
This study was authored by Lois Joy, Ph.D., Director, Research, and Nancy M. Carter, Ph.D., Vice President, Research, at Catalyst Inc. and by
Harvey M. Wagner, Ph.D., Professor, Kenan-Flager Business School, University of North Carolina, Chapel Hill, and Sriram Narayanan, Ph.D.,
Assistant Professor, Eli Broad School of Business, Michigan State University, East Lansing.
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