Diversity. It’s a buzzword that’s heralded everywhere, from college campuses to neighborhoods and the business world, and senior living companies may want to take heed: research overwhelmingly points to the value and importance of a gender-diverse corporate board.
Bringing together a variety of backgrounds, perspectives, work styles, and interests are highly beneficial when it comes to running a company, innovating, and staying relevant in a fast-paced and ever-evolving environment, and having both sexes represented on boards and at executive levels literally produces higher yields, according to some studies.
The clear benefits of gender diversity on boards are somewhat belied by a lack thereof. In 2011, women held only 16.1% of board seats in Fortune 500 companies, according to Catalyst Research, LLC, while 11.3% of those companies had no women on their boards.
In a 2012 report on gender diversity and corporate performance, Credit Suisse studied 2,360 companies on the Morgan Stanley Capital International (MSCI) All World Country Index and found that only 18.7% of those in North America had three or more women on their boards.
While senior living providers are in the business of taking care of their residents, the companies that often invest in them must also think of their bottom lines and how diversity can positively impact them.
The investment world, like many other industries, is heavily dominated by males, but research continues to make the case for welcoming more females into the proverbial old boys’ club. The healthcare and finance sectors, according to Credit Suisse, have already begun doing so, with the highest proportion of women board members compared to other sectors.
Adding women to the C-suite, research suggests, can help create a balance between companies’ pursuit of short-term profits and a broader focus on long-term goals such as a positive environmental, social, and governance impact, says an October report released by the Center for Responsible Business at the Haas School of Business, University of California, Berkeley.
Not only that, but more women in the “upper echelons of the corporate world” can also boost companies’ financial performance according to the Credit Suisse report that set out to discover whether gender diversity within corporate management improved performance.
The results of the report, says Credit Suisse, were “striking.”
“In testing the performance of 2,360 companies globally over the last six years, our analysis shows that it would on average have been better to have invested in corporates with women on their management boards than in those without,” the report says.
The key finding: “In a like-for-like comparison, companies with at least one woman on their board would have outperformed, in terms of share price performance, those with no women on the board over the course of the past six years,” says Credit Suisse.
Stocks of large-cap companies with a female presence on the board outperformed those with all-male boards by 26% worldwide, while companies with at least one woman board member grew their annual earnings by 14% on average compared to 10% for companies without women.
There are a few other areas where companies with at least one woman board member saw benefits compared to those with all-male boards in addition to better stock market performance, including higher returns on equity, higher earnings growth, and lower leverage.
Companies with more women on their boards of directors are also more likely to have strong governance structures that demonstrate a high level of transparency and avoid large-scale controversy, says the Center for Responsible Businesses. These companies are also more likely to have clear policies to avoid corrupt business dealings, have strong partnerships with local communities, and have high levels of disclosure and transparency.
For the senior living industry, where reputation is of paramount importance and strong relationships with surrounding communities is crucial—especially in light of healthcare reform—having the characteristics commonly seen in boards that include women is desirable.
With that in mind, Senior Housing News is kicking off a brand-new series: Influential Women in Senior Living.
It would be a stretch to declare 2013 The Year of Women, but after speaking with several who have caught our collective eye as innovators, savvy business founders and owners, and industry veterans and rising stars, the need for greater female presence in the corporate world is apparent.
In the next several weeks, we’ll be publishing features of women who have founded their own senior living brands or are running well-known companies, among other accomplishments.
Want to nominate someone to be featured in this series? Email me at editor[at]seniorhousingnews.com.
Written by Alyssa Gerace