Does corporate gender equality lead to outperformance?
Gender equality from a corporate perspective encompasses issues of workforce diversity as well as equal pay and career opportunities. Analysis of a unique gender based dataset collected by RobecoSAM and based on criteria identified in collaboration with the EDGE Certified Foundation confirms that there is inequality across all industries in terms of gender representation, pay and promotion. Our work is consistent with the growing body of academic research that finds that gender diversity and equality contribute to better corporate performance and investment returns.
Corporate gender diversity, i.e. a representative balance of men and women in the workforce, is becoming an increasingly relevant issue for corporations. The evidence that gender diversity contributes to better corporate performance is credible and growing. Corporations around the world have made it a top strategic priority to increase diversity and a growing number of countries are promoting greater female representation at senior management level through either mandatory or voluntary standards.
We consider gender ‘equality’ to be a broader issue than ‘diversity’, encompassing pay equity and equal access to career advancement opportunities for men and women at all levels of the organization, as well as the relative gender proportions in the workforce. Some countries are starting to introduce legislation addressing gender inequality in the workplace, such as the UK’s announcement in July 2015 to require companies with 250 employees or more to publish the gap between average female earnings and average male earnings.
As gender equality becomes a more significant issue for companies, it naturally becomes a possible material issue for investors to consider. In this paper, we analyze data from the largest companies (by market capitalization) companies around the world to evaluate the gender equality landscape in the context of the whole organization and between major industry groups, and we explore the link with share price performance.
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