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If you want a company to perform better, hire women

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Christian Fernsby |
Gender diversity
World   Morgan Stanley analysed the share-price performance of 1,875 companies

A report by Morgan Stanley found that the stock prices of gender-diverse companies tend to outperform their less diverse rivals.

Morgan Stanley’s HERS ranking is a new metric the investment bank has developed to evaluate gender diversity at companies and its impact on performance.

It determines the gender diversity of a company by factoring in the percentage of women on boards, in the executive and management team, and in the workforce.

“All four metrics have shown positive efficacy historically, across different regions, with relatively low correlation to each other,” Morgan Stanley said.

As part of the study, Morgan Stanley analysed the share-price performance of 1,875 companies on the MSCI World Index between 2010 and 2019.

It concluded that the share prices of companies with more female employees had outperformed their peers by 2.8 percent per annum during this period.

Of the 1,875 companies that Morgan Stanley analysed, those with the highest gender diversity scores included Louis Vuitton, which ranked first in Europe, and Apple, top in North America.

Facebook, JPMorgan and Walmart also scored highly.

Meanwhile, among the lowest ranked for gender diversity were British-Gas-owner Centrica, Juniper Networks and Carlsberg.

According to Morgan Stanley, companies with more women outperformed less diverse companies “even after controlling for size, yield, profitability and risk”.


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