March is Women’s History Month. Given FactSet’s expertise with data and analytics, we’d like to share nine data-based insights highlighting women in business.
Board and Management Diversity Across the Globe
Among Group of Seven (G-7) countries representing the world’s largest developed economies—Canada, France, Germany, Italy, Japan, United Kingdom, and United States—the percent of female board members is significantly higher than the percent of female CEOs.
Seven countries lead the way when looking at the percentages of female non-CEO executives: Australia, China, Hong Kong, Mexico, the Philippines, Singapore, and Thailand.
Percent of Women in Management Positions
Across management-level roles around the world, Human Resources is the only professional segment with women in the majority. The Legal and Investor Relations segments round out the top three segments for women.
Number of Female CEOs by Sector
Globally, there are nearly three times the number of CEOs who are women in the Financials and Health Care sectors compared to the Consumer Staples, Communication Services, and Utilities sectors.
Correlation of Gender Diversity Metrics with ROA, ROE, and Profit Margins
From Dr. Joanna Nash at FactSet client Realindex Investments in her December 2022 article, used with permission:
“The following table indicates the average cross-sectional correlations of the firm gender diversity (as captured by the percentage of females in senior management—senior management gender diversity and the percentage of females on the board—board gender diversity) with several firm characteristics. The highest correlation of 1 is represented in the lightest color, and the lower correlation is shown in the darker colors.
“We find that gender-diverse firms (both board and senior management) are typically higher quality firms, where gender diversity has a positive correlation with return on assets (ROA), return on equity (ROE), and profit margins (gross and net profit margins). They also tend to have higher price returns over the previous year (MOM12M) and lower market volatility, as evidenced by the negative correlation to 12-month price volatility (VOL12M).
“We also find that larger capitalized firms (as captured by size) tend to have higher diversity, especially in the boardroom, while diverse firms also appear to have high valuation multiples, as seen by the negative correlation between the diversity metrics and book yield (BY) and earnings yield (EY).”
Gender Diversity on Boards of Directors
Year over year for the past five years, there has been growth in the number of women who comprise U.S. boards of directors. The average annual increase is 2.6 percentage points. Notably, however, after the year-over-year increase peaked at 3.5 percentage points between 2020 to 2021, it fell by half to 1.7 percentage points between 2021 to 2022.
Female Representation on U.S. Boards
Between 2018 and 2022, there was an average annual decrease of nearly 4 percentage points in the share of companies with no females on the board. At the same time, the percent of women-majority boards increased year-over-year, though at a substantially slower pace (up 0.4 percentage points).
Gender Allocations in U.S. Boards
The percent of company boards of directors in which women comprise at least 30% of the members has increased, on average, by 8 percentage points annually since 2019. If that rate of increase continues, women will account for more than half of board membership in 2024.
Women in Management Positions
Similar to the global analysis of women across management-level roles, in the U.S., Human Resources is the only professional segment with women comprising the majority. Conversely, U.S. Compliance and Chief Administration executives who are women round out the top three segments. Notably, across 12 of the management-level roles measured globally, the U.S. outperforms in eight of them.
Percent of Female CEOs by Sector
When focusing on CEOs who are women, there is significant underperformance in the United States—the country trails global percentages in eight of 11 sectors. Financials is the top underperformer, where only 4.5% of U.S. women are CEOs compared to 27% globally.
Data provided in the Russell 3000® charts is from the FactSet workstation.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.