Diversity more than a woman at top: study

N E W Y O R K • Gender balance can be an important signal for investors, but they may be looking for it in the wrong place. A study by Calvert Impact Capital found that diversity in senior staff had a greater impact than the number of female directors or the gender of its founder.

“We saw a particularly strong relationship to women in leadership,” said Leigh Moran, Calvert’s director of strategy. “We think there’s a common misconception that incorporating gender is solely limited to investing in women-led businesses.”

In a study of its $23-billion global lending portfolio, Calvert determined companies with the most women in senior leadership positions — the people who report directly to the CEO — delivered double the average annual return on equity over the last 11 years compared with the companies with the fewest.

Calvert saw better performance when women comprised between 33 and 75 per cent of leadership, she said. Firms with the fewest women in senior management — 20 per cent or less — returned on average 4.4 per cent per year. Those with the most — more than 57 per cent women — returned 8.6 per cent.

The number of female directors seemed to matter less.

As an example, Moran pointed to Sunfunder Inc., a Kenya-based solar energy finance firm in the portfolio. With a male founder and CEO, it doesn’t immediately stand out as a gender play. A closer look reveals 50 per cent of the management team and 48 per cent of staff are female, as is 40 per cent of the board.

Sunfunder also recognizes the impact that solar home systems can have on women in particular, said Alana Heath, a debt funds associate based in London for Sunfunder.

“We don’t have an explicit gender focus, and yet it’s very core to our business.”