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Companies Led By Women Yield Higher Returns On Investment, Study Says

Companies Led By Women Yield Higher Returns On Investment, Study Says

By Jillian Kramer

Supporting women won't just make you feel good — it could put money in your pocket, too. According to new research, companies with female-centric boardrooms boast stocks with the highest returns. In fact, companies with what the study defines as "strong female leadership" saw a 36.4 percent greater return on equity than companies dominated by men.

To have what the study labeled "strong female leadership," a company must have at least three women on its board, a female CEO and at least one woman on its board, or a percentage of female board members that is higher than its home country's average.

With that standard set, market index provider MSCI analyzed more than 4,000 public companies around the world to find that female-led companies offered a 10.1 percent return on equity in the last six years, compared with male-led companies whose stock offered a 7.4 percent return. Why? "We think that enhanced decision making capacity of more diverse boards is likely an important benefit of having more women on boards," the study states.

Of course, there are still too few women in the C-Suite, making it tough to buy stock in companies with strong female leadership. Just about 15 percent of board seats around the world are held by women, the study shows, predicting it will take until 2027 for that number to double.

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Photo Credit: Jordan Strauss/Invision/AP