MSCI’s latest research confirms that a higher proportion of women directors on boards has a positive impact on companies’ financial performance. According to the report, companies with at least 30% of their board members women achieved nearly 19% higher cumulative returns between 2019 and 2024 than those with a lower proportion. Almost half (46%) of global companies have reached this 30% ratio.
The research also found that a higher proportion of female executives have financial expertise (40%) than their male counterparts (37%). However, MSCI also highlighted an important challenge: retaining female executives is more difficult than retaining male executives. While at least 30% of board seats in 80% of companies have been held by the same male directors over the past three years, the figure for women was only 13%. The research suggests that the higher turnover may also be due to the fact that women directors are more likely to hold positions on the boards of more companies. The data for October 2024 show that women have the same, if not higher, levels of financial and risk management experience than their male counterparts.
Boards increasingly expect their leaders to address complex business challenges such as sustainability, crisis management and the interests of stakeholders other than shareholders. The results of the research also support the case for companies to include more women directors, as this can not only increase diversity but also economic performance (Management Today).