The Effects of Gender Diversity

Thanks to a recent letter to the editor in The Wall Street Journal, I just learned of a study by Catalyst, a leading research and advisory organization, that found a link between gender diversity in the highest levels of corporate management and the financial performance of companies. The study was released in January of 2004, and an article in BusinessWeek Online contains the following summary:

[Catalyst] released a study showing that indeed gender diversity and financial performance are linked -- in a large and positive way. On average, companies with the highest percentage of women among their top officers had a return on equity 35.1% higher than those with the fewest high-level women. Total return to shareholders was 34% higher for the companies with the most executive women, vs. those with the fewest.

"The magnitude of the difference between low-gender diversity and high-gender diversity is quite big. I think everybody fundamentally believes gender diversity is a good thing, but to find something that strong is very impressive," says Harvey Wagner, an adviser on the study and a professor of business at the Kenan-Flagler School of Business at the University of North Carolina, Chapel Hill.

. . .

While Lang [the President of Catalyst] is quick to note that the study doesn't establish a cause-and-effect relationship, she is encouraged. "We hope people will take this report for what it is. At face value, as a lot of data that shows a correlation. Then they'll think about how it will impact their company," she says. "We hope companies will establish and maintain the policies that enable them to retain and recruit diverse women." Catalyst's goal: that valuing diversity "will become part of any company's DNA."

The full text of the Catalyst study can be found here.

On a related note, one of the central precepts of the Bahá'í Faith is that the diversity of humankind--whether it be diversity of gender, race, age, temperment, or countless other traits--is a source of strength when brought under a unifying influence. The findings of the Catalyst study seem to be a step towards the recognition of this principle. The following words of 'Abdu'l-Bahá bear eloquent testimony to this beautiful teaching:

. . . when divers shades of thought, temperament and character, are brought together under the power and influence of one central agency, the beauty and glory of human perfection will be revealed and made manifest.

Beyond the benefits that acrue to these organizations and particular individuals involved from promoting gender diveristy and greater equality, these advances have profound and far-reaching effects for the larger society, as described by 'Abdu'l-Bahá:

. . . let it be known once more that until woman and man recognize and realize equality, social and political progress here or anywhere will not be possible. For the world of humanity consists of two parts or members: one is woman; the other is man. Until these two members are equal in strength, the oneness of humanity cannot be established, and the happiness and felicity of mankind will not be a reality. God willing, this is to be so.