Catalyst, a non-profit devoted to issues involving women in the workplace, has released a study whose results are probably no surprise to most people: companies with females on the board of directors perform better than those without.
According to Reuters, "the study looked at three financial measures -- return on equity, return on sales and return on invested capital -- at companies in the Fortune 500 over the 2001-to-2004 period."
Most of the people who have been quoted on the study have said that it reflects the value of "diversity" in the boardroom. While that's certainly true, I would argue, perhaps politically incorrectly, that female directors may be less prone to the ego-driven desire to build empires, often at the expense of profitability, that leads to bad returns at so many companies.
With new funds coming out every day based on some idea that appears to have created alpha in the past, maybe it's time for a "Girl Power!" ETF, complete with television commercials featuring the Spice Girls and Rosie O'Donnell. I'd buy some shares.
Female directors lead to better performance
Posted Oct 2nd 2007 6:20PM by Zac Bissonnette
Filed under: Management
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