A study of 11,000 publicly listed companies globally has found that firms with a woman at the top perform much better than the rest of the market.
According to Bloomberg, the study by Robert Naess from Nordea Bank AB, Scandinavia’s largest bank, found that since 2009, those companies that had a female leader at the end of the calendar year (a chief executive or head of the board of directors) all went on to beat the industry performance benchmark the next year, in all but one year.
Female-led companies had an average 25% annualised return, doubling the 11% on the MSCI World Index
Naess told Bloomberg that while it’s absolutely clear companies can get a better return with a women in the top job, it’s still not clear why that’s the case.
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He suggests that it could come down to women being more conservative with predications — meaning less scope for nasty surprises. He added it could also be a matter that only the very best women can actually get to the top.
This study adds to other research backing the performance of companies with gender diversity at the top. Recently, Credit Suisse analysis of 2360 companies found that boards with at least one female director out-performed those without women directors on average growth and return on equity and share price performance.
Nordea is taking the results seriously. It’s Nordea Global Stable Equity Fund is loaded with companies run by women, and has delivered a 14% return every year over the past five years.
Smart investors may want to also pay attention.
This is an edited version of an article that was first published by Women’s Agenda.