MSCI have observed a correlation between female directors and strong talent-management practices and higher growth in employee productivity. Where there is a minimum 30% representation of women on boards, the evidence shows that there are greater shareholder returns.
Boards in New Zealand, Australia and globally (but not in emerging markets) are seeing an average of 30% of women on boards. But there are still companies that have no representation. Based on the greater shareholder returns, aiming to have that diversity is not just about ethical investing, it goes straight to the bottom line as well. It is good business.
MSCI have recently produced a podcast about the value of having women on boards which you can find here: What Diversity Fatigue? More Women Filled More Firm’s Senior Roles {https://www.msci.com/www/perspectives-podcast/what-diversity-fatigue-more/03705324988}
Our fund managers that produce annual reports on their Responsibility, Sustainability, ESG initiatives (and there are more and more of them), update us on how they are going with increasing the diversity on their boards and in senior management. As Pathfinder reports, a number of companies don’t provide clear reporting, so it is a topic that they drill down on with their engagement and analysis of companies. The two graphs attached to this article show the reports from Pathfinder and from Alphinity for funds that we recommend to our clients.
