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- Gender diversity has become an important priority for investors and executives.
- That’s because firms that are more gender diverse have been shown to outperform their less-diverse counterparts.
- Morgan Stanley recently published a report on this topic, which introduced a new metric to evaluate gender diversity for more socially conscious investments and employment decisions.
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Firms that prioritize equal representation actually outperform firms that are less diverse.
That’s according to Morgan Stanley’s research on gender diversity, which identifies the difference in performance, through average returns, as 2.8% annually — which translates to a sizable sum if you’re a firm as large as Walmart or Apple.
Morgan Stanley’s new study is a follow-up to a report it released three years ago to help investors identify leaders in gender diversity. With this recent iteration, the company’s researchers have introduced a new concept: the Holistic Equal Representation (HER) score.
The score takes four factors into account that have historically been reliable indicators of gender diversity: the percentage of women who are (1) board members, (2) executives, (3) managers, and (4) employees.
Even after controlling for size, yield, profitability, and risk, the researchers found that in the past nine years, firms with higher HER Scores outperformed those with lower scores.
"The stocks of gender-diverse companies tend to be larger, have higher yield and skew toward a lower beta," they wrote.
The Morgan Stanley report is geared toward investors, but employees who prioritize gender diversity (and startup founders or executives who seek to foster it), can benefit from understanding which companies in North America lead the way with top HER Scores.
Here are the top 15 US-based companies on the report, along with their Global Industry Classification Standard (GICS) sector:
15. Comcast
Reuters
GICS Sector: Communications
Why the company was selected: According to Comcast’s 2018 gender diversity data, 41% of directors are women, 39% of employees in VP positions and above are women, and 37% of the members of the executive leadership team are women.
Female employees created the TECHWomen platform in 2014, which now has over 2,500 members in 18 local chapters. Women comprise 35% of Comcast’s overall workforce, and the company has set the goal of eventually arriving at a workforce that is 50% women at every level.
14. Merck
Merck/Facebook
GICS Sector: Healthcare
Why the company was selected: According to its 2017/2018 Global Diversity and Inclusion report, the overall percentage of female new hires at Merck in 2017 was 49%. At the macro level, the hires were 40% for women in management roles, 38% for women on the senior management team, 32% for women in executive roles, and 23% for women on the board across that same year.
The company also has a women’s sponsorship program and has hosted two Women in STEMM (science, technology, engineering, manufacturing, and marketing) conferences for its employees.
13. Coca-Cola
YouTube/Coca-Cola
GICS Sector: Consumer staples
Why the company was selected: At the end of 2017, 47.2% of the overall talent pool at Coca-Cola was female. There were 50.2% of women represented in professional roles, 51.1% in first-level leadership, 44.5% in mid-level leadership, and 32.2% in senior leadership.
The company has also trained more than 2,300 female business owners since launching its Supplier Training & Empowerment Program in 2014, which supplements other initiatives.
See the rest of the story at Business Insider
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Source: Business Insider – feedback@businessinsider.com (Sherin Shibu)