Shares perform best in companies with gender diverse boards during virus

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Shares in companies with more women have performed better than their competitors during the coronavirus, according to an analysis of FTSE250 companies by New Street Group.

The leadership consultancy found that shares in the top 25 FTSE250 companies with the most diverse boards fell in value by an average of 24% since the start of 2020, while a comparable portfolio of 25 FTSE 250 companies with less diverse boards saw their share prices fall 29%.

The company argued that better levels of gender diversity at board level may have been perceived by investors as demonstrating “better overall governance and board structure”.

“This may have provided investors more confidence in how those companies might manage during difficult trading conditions,” it said.

The New Street Group research follows another study last week by diversity consultancy The Pipeline, which found a link between a lack of gender diversity in senior roles and lower net profit margins.

Doug Baird, CEO at New Street Group said: “Significant progress has been made in recent years to balance the gender gap at executive level. However, it’s important that women are also filling key decision-making roles and not just non-executive positions. That way they are able to more easily influence decision-making.

“Coronavirus has fundamentally altered how we work and resulted in significant changes being made to organisational structures. “

With the shift towards home-working likely to be a long-term trend, this increased flexibility may help working mothers ascend to and retain more senior corporate positions.”

He added that company directors should consider how work practices could be adapted post-coronavirus to make workplaces more inclusive to women.

New Street Group looked at the share price performance between January and June of 25 FTSE250 companies that have been identified by the Hampton-Alexander Review as having the greatest gender diversity at board level.

Those with the lowest fall in share price during the pandemic included Lancashire Holdings, Grainger PLC, Direct Line Insurance Group, Dunelm Group and B&M Value Retail.