Companies With Women On Their Boards Have Almost Double Return on Investment Compared To Men Only Boards
The Good News
- An analysis of return on equity (ROE) data of top 100 Indian companies (BSE 100) by Randstad, a leading HR services provider, says that companies with women on their boards have a positive impact on ROE
- The board of a private sector company, run by a professional CEO with a mix of both men and women, helped ROE rise by 4.4% in 2014 over the last year. In contrast, a similar company with a men-only board saw its ROE rise by a mere.1.8% in the same period
- This holds true even for family-run companies. Those which had more than two women directors saw their ROE rise by 1% over last year while those that had only men on their board fared worse, showing a negative difference of 1.6%
- When all private companies with women on their boards were considered, the findings were that the ROE was higher by 1.4% over 2013 as against no difference for companies with only men on their boards
- Industry-wise data suggests that information communication technology and consumer goods sector has the highest representation of women in their boards with 13.27% and 13.08%, respectively
- The lowest representation of women has been found in the energy and infrastructure sector with 5.36%.
The Disturbing News
- Only 5% of working women in India make it to senior leadership positions in the corporate sector, compared to the global average of 20 percent
- Women’s strength in the labour force: Junior Management 28%, Middle Management 14.91%
- India ranks at the top in the dropout rate with 48% dropping out between junior to middle management levels
- Women in India, according to research firm Catalyst, hold barely 5% of boardseats—lower than all other BRICS countries
- As of June 2014, more than 60% of the 1,461 companies listed on the National Stock Exchange do not have a single woman member on their board of directors
Tatva is a leadership development company focusing on Diversity & Inclusion, executive coaching and leadership development. The company’s focus is on developing the women’s leadership pipeline within organisations. Aligning to its name, Tatvã – a Sanskrit word which means the core / essence – the company’s offerings are wholistic, integrating the different polarities of life.