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Women on Boards means better bets for investors

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Investing in companies with management teams which consist of at least 35 percent women considerably improved investment performance during the recent financial crisis.

Michel Ferrary, professor of Human Resource Management at SKEMA Business School, followed the stock performance of each company in the Parisian stock index, the CAC40, between 2007 and 2012. He then composed the Femina Index, a separate index of companies whose management teams consisted of at least 35 percent women. Over the six years, the CAC40 lost 34.70 percent of its value, whereas companies in the Femina Index lost only 5.28 percent. “Our analysis confirms that investing in companies with a feminised management is an investment strategy which is responsible and profitable,” said professor Ferrary. “Promoting diversity and employing women in posts of responsibility contributes toward the improved financial performance of companies during crises.”

Other studies published on the theme had already explored the link between feminisation and performance, but these only considered the number of women on the board of directors. Professor Ferrary’s study proposed a different analysis; the correlation between the feminisation of the whole management team and the companies’ stock performances. Professor Ferrary had previously demonstrated in his research that feminised management teams performed better during the financial crisis than more masculinised teams, and that companies whose workforce consisted of more than 35 percent women generally saw a superior economic performance.

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