![]() ![]() We find that gender-diverse boards outperform their peers on ESG metrics, and this correlation becomes stronger for long-term gender-diverse boards. Notably, the ISS-oekom methodology does not include board gender diversity as a score component the two data sets (board gender diversity and ESG scores) are independent of each other, reducing concerns of bias. As a metric of ESG performance, we use ISS-oekom’s ESG scores, which include a general combined ESG Score, an Environmental Score, and a Social Score. Three women was chosen as the gender diversity threshold to provide consistency with previous studies. Here, the phrase “gender-diverse boards” refers to boards with three or more women, and non-diverse boards as those with two or fewer women. In particular, we compare Environmental, Social and Governance (ESG) performance for gender-diverse boards and their non-diverse counterparts in the S&P 500 index. We find that companies with gender-diverse boards are associated with better performance on ISS’ environmental and social risk management measures. In this post, we examine the relationship between board gender diversity and Environmental & Social (E&S) management. Finally, the economic argument for gender diversity, backed by a growing literature, suggests that board gender diversity can serve as a driver for better performance and increased financial returns. Third, women directors are likely to bring fresh and diverse perspectives to complex issues. Second, expanding the perceived pool of director candidates to an under-tapped population of highly qualified women leaders opens a new source of managerial talent, who are also more representative of the general workforce and society. First, there is the normative argument based on equity and fairness, which suggests that women and men should have an equal opportunity to attain leadership positions, including corporate board memberships. Proponents of more women on corporate boards have brought forth multiple arguments that have become widely acceptable in the field of corporate governance and more broadly.
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