Gender Equity Insights 2020, the latest in a series of high-quality data-driven reports from the partnership between Bankwest Curtin Economic Centre and Workplace Gender Equality Agency (WGEA), was released on 19 June 2020 and provides the best business case yet for gender balance in the boardroom and in senior management and leadership teams.
The report lands on our desks at a time when companies need to find the best possible teams to lead them (and all of us) through the ongoing economic and social fallout from COVID-19.
It found that increasing the number of women in senior leadership leads to a greater likelihood of companies outperforming their sector in six key profitability and performance metrics:
The key findings are summarised in the infographics below
- Return on equity
- EBIT (earnings before interest and tax)
- Sales per worker
- Return on assets
- Tobin’s Q (an indicator of the value a company is offering to its shareholders)
- Dividend yield
and show how an increase in female representation at board, CEO and key management level on ASX companies leads to an increase in market value of 4.9% or greater. Interestingly the converse is also true – reducing the share of women in top management tiers results in a company underperforming its sector.
The report also highlights the critical importance of the WGEA, the agency that administers the Workplace Gender Equality Act (2012) which requires all private companies of more than 100 employees to reports annually against six gender equality indicators. Australia is the world-leader in the collection and public release of meaningful, longitudinal, gendered workforce data, and this report clearly demonstrates why its collection matters.
The ‘business benefit’ of having more equal numbers of women on boards and in leadership roles has been argued ever since we started Women on Boards in 2006. There have been numerous studies showing tenuous links, including the almost forgotten Reiby Research note of 2010, work by McKinsey and others, but this is the strongest causal link to date.
Congratulations to Libby Lyons and the team at WGEA for their work in ensuring the data collected annually on 4.4million employees across 11,000+ organisations is readily available to be used to improve remuneration and employment of women within Australian workplaces.
Click here to acceess the report