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All-male executive boards underperform to the cost of billions, research finds

Companies with diverse executive boards outperform those with all-male boards, according to new research.

The study from Grant Thornton looked at listed companies in the UK, US and India, and revealed that the all-male executive boards had a total 'opportunity cost' (lower returns on investment) of US$655 billion last year.

It found that boards with at least one female executive board member outperformed those with male-only boards in each of the three markets analysed.

For the UK's FTSE 350 companies, the gap between the two was 0.53 per cent, equivalent to an opportunity cost of US$74 billion, or around 3 per cent of GDP.

More women executive directors needed

Around one in four directors on FTSE 100 companies are now women, up from 12.5 per cent at the time of Lord Davies' report Women on Boards, recently meeting the 25 per cent target for 2015 which the report set.

While this has widely been recognised as good progress, commentators claim that too few women hold executive directorships, to run companies on a day-to-day basis, rather than non-executive posts. Fewer than one in ten executive directors in FTSE 100 companies are currently women.

Unlock the potential

Francesca Lagerberg, global leader for tax services at Grant Thornton, said, 'The message from our research is clear: there is a large opportunity cost for companies associated with male-only executive boards.

'Those businesses stuck in the past are not fully unlocking their growth potential. Like a world still addicted to fossil fuels, these companies are suffering now.

'A lack of action now will make it all the more difficult to respond in the future when both problems are likely to be more acute.'

 

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