Driving Investment: Reaping the rewards through Gender Diversity

It was Stephen Covey that once said: “Strength lies in differences, not in similarities.”   Business Diversity is more than just a catch-phrase of the current season.  In fact, McKinsey has been examining diversity in the workplace for several years and in a recent report, they examined company data across a number of industries globally – and their findings were clear. Here’s a selection of what they found:

  • Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
  • Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.
  • In the United Kingdom, greater gender diversity on the senior-executive team corresponded to the highest performance uplift in our data set: for every 10 percent increase in gender diversity, EBIT rose by 3.5 percent.

And in the world of Corporate Venturing and Corporate Venture investment, never has a truer word been spoken.  But we’re not speaking about diversifying your investment portfolio. We’re talking about the opportunity that investing in diversity-focussed businesses brings to you as the investor.

Shelley Ford, a financial advisor with The Pelican Bay Group of Morgan Stanley Wealth Management, states, “Recent trends show that investors are becoming more likely to invest in companies that align with their values. No longer do investors that seek to create social good need to accept unattractive returns. If gender diversity is an issue you care about, consider investments in companies with greater representation of women on Boards of Directors and in senior leadership, and in funds focused on women’s healthcare solutions or increasing access to capital for women entrepreneurs in developing companies.”

And it is Morgan Stanley themselves that discusses gender diversity as an investment opportunity in more detail. To them, gender diversity is about “identifying the ways in which achieving balance in representation, empowerment, and economic opportunity is material to financial outcomes. A growing body of evidence points to better financial performance associated with higher levels of gender diversity“.

And it was concluded in the same report by Morgan Stanley, that as greater gender diversity and balance is reached across the business economy, and as the case for business diversity becomes more apparent, investors will start to position their own investment portfolios to be able to take advantage of these opportunities.

And what does that mean for your investment?

Diverse teams drive sales. In a tough economy, the workforce-marketplace-customer connectivity has never proved more important, and businesses who have Diversity & Inclusion at the heart of what they do means that they not are not merely ticking a box, but driving a positive business culture that underpins a productive, profitable organisation, leaving you with not only positive returns on your investment, but a like-minded investment portfolio that is strategically aligned with your own values.

 


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2018-03-12T17:39:48+00:00March 12th, 2018|Corporate Venturing, News|Comments Off on Driving Investment: Reaping the rewards through Gender Diversity