{"id":33759,"date":"2021-11-19T18:04:16","date_gmt":"2021-11-19T23:04:16","guid":{"rendered":"https:\/\/test.greenmoney.com\/2025\/?p=33759"},"modified":"2021-11-20T02:23:18","modified_gmt":"2021-11-20T07:23:18","slug":"accelerating-the-diversity-flywheel-in-2022-and-beyond","status":"publish","type":"post","link":"https:\/\/test.greenmoney.com\/2025\/accelerating-the-diversity-flywheel-in-2022-and-beyond\/","title":{"rendered":"Accelerating the Diversity Flywheel in 2022 and Beyond"},"content":{"rendered":"
>> Back to December 2021 Issue<\/a><\/div>\n

Every year, the message becomes clearer. Diversity is just good for businesses that embrace it \u2013 and bad for those that don\u2019t.<\/h3>\n

\"EmilyBy now, many companies understand that a diverse workforce can enhance innovation and in turn profitability. Many are also realizing the reverse is also true. As research indicates, companies with less diversity tends to correlate with those that may underperform. One recent study from McKinsey & Co. found companies with executive teams in the top quartile for gender diversity were 25% more likely to have above-average profitability than companies in the bottom quartile.1<\/sup><\/p>\n

Moreover, the same McKinsey study found companies in the bottom quartile for both gender and ethnic diversity to be 27% less likely to achieve above-average profitability. This may be because such firms face a number of business risks, including acquiring and retaining the best talent, and creating an environment where that talent can achieve optimal productivity.<\/p>\n

Women Move Markets<\/h2>\n

Calvert\u2019s own research, available on our website (www.calvert.com<\/a>), shows that the number of women in named executive officer (NEO) positions has meaningful correlation with equity performance, as does the number of women on corporate boards. We found that U.S. large-cap companies with at least four women on the board outperformed the most when compared to those with less than four women board members. For the U.S. small-cap equity market and non-U.S. equity markets, we found the current tipping point for a positive performance correlation to be at least two women on corporate boards.2<\/sup><\/p>\n

In short, companies with a more diverse workforce, including more women in executive roles and in the board room, stand to benefit from a range of financial, social and reputational advantages.<\/p>\n

As McKinsey and others\u00a0report, companies with a diverse workforce are beating their less-diverse counterparts in terms of higher innovation, better employee engagement, improved reputation and decision-making, as well as performance. We see every reason for this trend to accelerate in 2022 and beyond, as responsible investors increasingly recognize that driving capital to companies with good diversity practices is a sound business decision.<\/p>\n

Gains in 2020, More Work to Be Done<\/h2>\n

However, we still have work to do to achieve true gender parity in corporate America. McKinsey\u2019s updated report, \u201cWomen in the Workplace 2021,\u201d found that in company C-suites, fewer than one in four leaders is a woman, and just four percent are women of color.3<\/sup> It noted that \u201cin spite of the challenges of the COVID-19 crisis, women\u2019s representation improved across all levels of the corporate pipeline in 2020.\u201d However, pervasive burnout and dropout of women from the workforce during the pandemic are threatening progress. Significant gaps also persist, particularly for women of color, who are losing representation at every rung of the corporate ladder. The study states that from entry level to the C-suite, the representation of women of color drops off by more than 75 percent and that \u201cas a result, women of color account for only 4 percent of C-suite leaders, a number that hasn\u2019t moved significantly in the past three years.\u201d<\/p>\n