Calvert Research and Management, an Eaton Vance responsible investing affiliate, says the investment case for advancing
gender equality in corporations is strong and clear. Women make up 50% of the global working-age population and have
educational attainment that is close to comparable with men’s globally.
However, figures show that women have significantly lower labour participation rates than men globally and the gap
widens when management roles are included.
Drawing on Calvert’s long history of leadership advancing gender equity in the workplace, their newly launched report
“Evaluating the Glass Ceiling: Understanding and unlocking the value in gender equity” outlines the business case for
corporations to support more diverse and inclusive workforces from the boardroom to the front line and how investors can
be called upon to push for changes that will have a material impact on long-term shareholder value.
In order to do this, Calvert evaluated the research on gender diversity’s material benefits both to companies’ bottom
lines and to the broader economy, highlight relevant trends in government and investor actions, and review progress on
the path to gender equity, providing global and industry context as needed.
Calvert’s research supports three main findings:
1. Companies that prioritize diverse and inclusive workplaces, demonstrated by greater female presence in leadership
positions, have stronger financial performance over time
2. Women’s labor force participation is likely to increase when strong and effective family friendly policies are in
3. Investors have a role to play in ensuring boards and management support policies that promote gender equity.
Successful companies must be able to understand the various trends that will determine their competitive future and plan
Recent research demonstrates the value of gender diversity at all levels of the corporate structure, particularly at the
higher echelons of the boardroom and C-suite. Studies link a greater female presence with many metrics of increased
corporate financial success.
The most robust body of research links board gender diversity to positive business performance. A study by MSCI found
that companies with at least three women on their boards had median increases of 10% in return-on-equity (ROE) and 37%
on earnings-per-share (EPS) from 2011-16. In contrast, those with no women had median decreases of 1% and 8%,
respectively, over the same period. Furthermore, adding any number of female directors correlated with higher increases
in EPS compared to losing women from the board during the same period.1 Credit Suisse linked board diversity to higher
equity, lower leverage, and higher price/book ratios in 2012, 2014, and 2016.2
Similar findings apply to executive leadership. A 2016 study by Peterson Institute for International Economics analysed
almost 22,000 firms globally and found a repeated and significant link between higher level of females in C-suite
management and firm profitability.3 In a 2018 analysis, McKinsey found that companies in the top quartile for gender
diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior
value creation, affirming similar findings from a 2015 study.4
These trends are harder to measure at the employee level due to less robust corporate disclosure. However,
gender-diverse teams are associated with innovation and market opportunities. In 2017 and 2018, the Boston Consulting
Group examined revenue tied to recently launched products and services, concluding that revenue rose when the proportion
of female managers eclipsed 20%.5
Countries mandating more women on boards
In some countries, government intervention has pushed companies to focus on changing board-election processes to better
reflect the available pool of diverse director talent. Norway started the push in 2003 with its requirement that 40% of
company boards be female, and momentum has increased worldwide since then. These strong regulations and guidance are
indicative of growing government interest in assuring that companies under their jurisdiction stay current with best
The United States is the notable G7 country without formal government requirements or targets to advance gender equity
in the private sector.
Investors are also increasingly pressuring companies to diversify. In fact, 53% of U.S investors think companies should
take a public stand on workplace diversity and 57% strongly agree that board and executive diversity affect their trust
when considering investing in or recommending a company.6
The 2017 launch of the CEO Action for Diversity and Inclusion — in which more than 500 CEOs pledged to improve workplace
programs and training, share best practices, and track progress — indicates that executives are listening.
1. The Tipping Point: Women on Boards and Financial Performance, MSCI, December 2016: https://www.msci.com/documents/10199/fd1f8228-cc07-4789-acee-3f9ed97ee8bb
3. "Is Gender Diversity Profitable? Evidence from a Global Survey," Peterson Institute for International Economics,
Marcus Noland, Tyler Moran, and Barbara Kotschwar, 2/1/2016: https://piie.com/publications/wp/wp16-3.pdf
5. "The Mix that Matters: Innovation through Diversity," Boston Consulting Group, April 2017, https://www.bcg.com/en-us/publications/2018/how-diverse-leadership-teams-boost-innovation.aspx
; "How Diverse Leadership Teams Boost Innovation," Boston Consulting Group, January 23, 2018, https://www.bcg.com/en-us/publications/2018/how-diverse-leadership-teams-boost-innovation.aspx