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Companies with more women directors generate a 36% higher return on equity

Investors benefit when a company has more women on its board of directors, according to a new report by MSCI, the US-based financial index provider.

Firms with a strong-female influence on their boards performed 36% better in terms of return on equity than those that didn’t. MSCI defined a “strong-female influence” as having three or more female directors, or a female CEO and another female director. Those firms had a 10.1% return on equity, a measure of the profits a company is garnering for shareholders.

Other studies have reached similar conclusions. A Credit Suisse analysis of large companies with and without female directors published in Sept. 2014 said that the stock market performance of organizations with women on their boards was 5% better than those with only men.

Helena Morrissey, chief executive of Newton Investment Management, a subsidiary of BNY Mellon, told the Financial Times that “all the research ever done, on every region, shows a positive correlation between women on boards and financial returns and it is no surprise that the same is true when there are more women in leadership teams.”

MSCI’s report showed some key differences between the US and Europe. While US companies are less likely to have female board members than European firms, they’re 48% more likely to have female chief executives or CFOs. Females are also very well educated—female directors in the companies MSCI surveyed are more likely to have advanced degrees than their male counterparts.

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