BlackRock Report Finds Gender Diversity Key to Company Performance

Africa – A new report from BlackRock, the asset management firm, reveals that companies with gender diversity at all levels tend to outperform their less diverse counterparts.

According to World Economic Forum, this finding underscores the importance of investing in women and workforce diversity for enhancing company performance.

Performance Boost from Gender Diversity

Between 2011 and 2022, firms with diverse workforces outperformed those with less diversity by an average of 1.2%, according to BlackRock’s study titled “Lifting Global Growth by Investing in Women.” The report emphasizes that it’s not merely the high percentage of women in the workforce that drives business performance but rather the presence of a balanced and diverse workforce.

‘Sweet Spot’ for Diversity

Interestingly, BlackRock’s research indicates that companies with neither the highest nor the lowest percentage of women in their workforce perform the best, suggesting a ‘sweet spot’ for diversity. These most diverse companies outperformed the least diverse by an average of 29% annually from 2013 to 2022.

Regional Disparities in Women’s Workforce Participation

While women’s global workforce participation is almost on par with men’s, significant disparities exist between regions and countries. The Middle East, North Africa, South Asia, and Latin America show particularly low percentages of women in the workforce. For instance, women constitute only 23% of India’s labor force.

The Importance of Diversity at All Organizational Levels

BlackRock’s data highlights the importance of employing women and diverse workers across all organizational levels. Firms that do this have shown better financial performance. Notably, European and North American organizations have shown the greatest outperformance in this regard.

Women CEOs and Company Performance

Despite only 6% of the world’s largest corporations being led by women CEOs, companies under their leadership have almost consistently outperformed those led by men over the past decade. The prevalence of women CEOs varies by country, with higher percentages in Finland, Norway, Sweden, and Singapore.

Driving Global Growth through Gender Equality

The World Economic Forum in its Global Gender Gap Report 2023 notes the wide-ranging consequences on the global economy when women and girls lack economic access and opportunity. Governments can aid women’s workforce participation through policies like affordable childcare, better parental leave, and supporting the care economy. Additionally, more gender-equal approaches in pay equity, health and safety standards, and preventing workplace harassment are crucial.

The Forum underscores that a strong gender strategy is essential for attracting top talent and ensuring long-term economic performance, resilience, and survival.