Discovering ways to increase a company’s profit margin is crucial in today’s bottom line driven economy. One of the ways profit is measured is a corporate’s ROE or return on Equity. According to the global research firm MSCI ESG, companies with “strong female representation on boards generated a Return on Equity of 10.1% per year versus 7.4% for those without.” With an almost 3% difference, female inclusion on board of directors should probably be a priority for global corporations.
While numbers are trending upwards, it has been incremental increases. The Global Board Diversity Analysis (GDBA) states that in 2016, “almost 19% of seats on the boards of the largest companies in the world were held by women. That’s an increase of nearly 5% since 2012.”
Taking a look at organization diversity by country, the US falls somewhere in the middle with countries such as Italy and France performing better due to government mandates. Other countries that are more diverse in terms of women on boardrooms include Canada, South Africa, Brazil and surprisingly Russia. Countries still struggling with the concept include China, Japan, Mexico, and the Czech Republic.
So what does this mean for the future? Well, according to Fast Company “If progress continues at the rate we’ve seen globally over the last two years (1.6% per year), the average number of women per board will reach three by 2021, while gender parity remains 20 years away.”