A Stanford Graduate School of Business published study has shown that gender diversity helps boost share prices.
According to reporting by the Business Insider, researchers at Stanford, Northwestern, Dartmouth, and the Hong Kong University of Science and Technology utilised two field studies and an experiment to test correlation between a company's share price and gender diversity.
The results of their studies showed that increased gender diversity helped the share prices on the day of tech companies and financial companies announcing higher-than-expected gender diversity.
Part of the study was asking people with managerial experience to make a bet about what a share price would do when a company revealed better-than-expected gender diversity. The result was that those people thought the companies were "more likely to think outside of the box, more ethical, less prone to personality conflicts, less likely to attract negative political attention, and more likely to litigate lawsuits instead of settling."
Share price reaction is interesting, but I think it's the above reasoning that may show why businesses should have women at all levels of management. Some men have a reputation for making rash decisions, or trying to outdo a competitor just for the sake of winning even if it's not the best decision for the company.
The lead up to the GFC in the US shows how dangerous it can get when people/men are far too aggressive financially.
To add further fuel to this argument, according to Fidelity studies, women earn higher returns from investing than men and they save more. This is due to a variety of reasons such as being more likely to plan, more likely to think long-term, taking on less risk (for example, by going for more diversification) and being more patient & less trading.
Foolish takeaway
I certainly feel that there should be more women around the business and investment world. It should always be the best person for the job, regardless of gender.
There is a growing group of women CEOs on the ASX such as Jayne Hrdlicka at A2 Milk Company Ltd (ASX: A2M), Shemara Wikramanayake at Macquarie Group Ltd (ASX: MQG) and Elizabeth Gaines at Fortescue Metals Group Limited (ASX: FMG). It will be interesting to see how this group do over the coming years.
