Gender Diversity Boosts Bottom Line, Report Says

Catalyst, a New York-based organization that studies and supports women business leaders, has released a research report that links diversity to higher return on equity (ROE) and total shareholder return (TSR). The report, "The Bottom Line: Connecting Corporate Performance and Gender Diversity," examined 353 companies for performance in 1996 through 2000. The research, sponsored by BMO Financial Group, concludes that the companies with the highest level of representation of women in executive ranks post a 35% higher ROE and a 34% higher TRS. The researchers divided the companies into quartiles based on the number of executive women and compared the top and bottom quartiles, which were composed of 88 and 89 companies respectively. "We controlled for industry and company differences, and the conclusion was still the same," says Catalyst President Illene H. Lang. "Top-performing companies have a higher representation of women on the leadership teams.