- BCG Gender Diversity Index shows: Diversely managed companies are more successful on the financial markets
- Parity management structures have a positive influence on companies’ climate and sustainability policies
- 80 percent of board positions are still held by men – the proportion of women has increased by three percentage points compared to the previous year
- Airport operator Fraport is “Diversity Champion”, followed by Commerzbank and Siemens Healthineers
Munich— Diversity in top management pays off for investors. On average, diversely managed companies have achieved a stock return that is five percentage points higher in the past three years than those companies whose management ranks are predominantly male. This is shown by the BCG Gender Diversity Index 2023, which the Boston Consulting Group (BCG) publishes annually together with the Technical University of Munich (TUM).
The top performers in the index not only show a higher total shareholder return (TSR is a metric that reflects the return on stocks) than the bottom performers, but also increased activity in mergers and acquisitions (M&A). The BCG analysis shows: The top 20 companies conclude around 40 percent more M&A deals than the bottom 20. “Gender diversity brings a variety of perspectives into decision-making. This could be a potential competitive advantage in the complex evaluation of M&A transactions,” says Nicole Voigt, co-author of the study and BCG partner.
For the Gender Diversity Index, BCG examines the 100 largest German companies that are listed in the prime indices (DAX, MDAX, SDAX) and classifies them according to the factors of parity and remuneration in the executive board and supervisory board. The index has been published since 2017. The data basis not only enables a point-by-point view, but also a historical analysis. “The data from the past seven years shows a trend: diverse and non-diverse companies are showing different behavioral patterns in more and more decision-making areas,” says Marcus van der Vegte, also co-author of the study and BCG partner.
Greater sense of responsibility for climate and sustainability
There is a correlation between gender diversity and climate awareness. Each of the top 20 companies sets specific goals for reducing CO2 emissions and reports on them. Among the bottom 20 companies, only 13 out of 20 agree on specific goals and only 9 document their progress. A similar picture emerges when it comes to commitment to official sustainability goals: 65 percent of the top 20 companies pursue the goals of the Science-Based Targets Initiative (SBTi) – an initiative that gives companies the opportunity to set scientifically based emissions targets Promote climate protection. In the comparison cohort, 40 percent are committed to this. “The findings suggest that there is a correlation between gender diversity in companies, the level of commitment to climate protection goals and the general sustainability orientation. As expected, diversity is closely related to other ESG dimensions,” says Prof. Dr. Isabell M. Welpe from the Technical University of Munich, professor of business administration and co-author of the BCG Gender Diversity Index.
On average, one woman out of five men
“Considering all the positive factors that a mix of women and men in leadership positions brings, it is astonishing that so few German companies have so far exploited this potential,” says Marcus van der Vegte. The BCG Gender Diversity Index shows for the seventh time in a row that the boards of the 100 largest German companies are still dominated by men. However, there is a steady upward trend: in 2023, 18 percent of women will hold board positions – this corresponds to an increase of three percentage points compared to the previous year. A connection with the Second Leadership Positions Act (FüPoG II) is obvious. Since August 2022, this has required at least one woman and at least one man for new appointments to boards of directors with more than three members. Since then, a total of 17 index companies have appointed a woman to their board of directors for the first time. “Despite the positive developments, there is still a large gender gap. Diversity in corporate culture starts with management and is controlled from there. That’s why it’s important to make pioneers visible and learn from them,” says Nicole Voigt.
