Gender diversity in leadership is linked to improved environmental, social, and governance (ESG) standards. Through exploring existing research, including 70 peer-reviewed papers published from 2008 to 2017, this report demonstrates that a higher proportion of women on boards and in senior management is positively connected to an array of non-financial company performance indicators. These include workforce diversity, higher environmental quality, and better policies and practices relating to sustainability. Further advantages of diversity are enhanced risk management and corporate reputation, customer and stakeholder engagement, and improvement of business metrics.

Strong ESG performance supports better corporate performance, including financial metrics. Research highlights a significant link between better ESG and company performance, including improved internal controls and management oversight, positive workplace environment, and reputation and brand. These results furnish an argument made for the value of women’s participation in boards and senior management. Critiques of research connecting female representation in boardrooms and senior management with better financial performance and scrutiny of share price would do well to take into account the broader view of corporate purpose and the role of directors to include higher ethical, social, environmental, and governance related standards. Ultimately, the adoption of higher ethics and governance standards will encourage value assessment far beyond financial indicators.

The compendium of evidence showing how greater gender balance at the top enhances ESG standards and strengthens financial performance is substantial. Firms worldwide will benefit from viewing business performance, corporate purpose, and director roles through this broader corporate perspective. Further research may explore significant gaps in the link between increased female representation and accompanying benefits for smaller companies in emerging markets.

Actions to increase gender balance are essential to business performance. Companies worldwide would benefit from taking action to increase gender diversity as a broader strategy for promoting better business performance and greater financial results. We recommend exploring the opportunity to diversify boards and executive teams with diverse backgrounds and experiences, including the insertion of women at all levels. Companies should take this opportunity to review employment selection processes, board member skills assessments, and succession planning to devise more effective recruitment strategies that ensure the best talent fills positions.