More women needed in company boards

The share of women in the boards of 140 Polish listed companies from the WIG20, mWIG40, and sWIG80 indices was only 13.8 percent at the end of 2019. During the decade, it increased by only 3.8 pp. Firms with a higher representation of women in government saw advantages in terms of higher net margins and lower equity volatility. These are data from the report ‘The participation of women in authorities and the effectiveness of companies’ published by CFA Society Poland. The largest listed companies from WIG20 fared best in terms of diversity, and the worst – the sWIG80.

“Non-financial criteria, including diversity in corporate governance, are increasingly important in investor decisions. The participation of women in the management boards and supervisory boards of listed companies is not only a matter of corporate governance but also a business matter. Along with the popularization of the inclusion of these criteria in making investment decisions, this indicator should be increasingly used by investors when selecting companies for the portfolio in 2021,” Milena Olszewska-Miszuris, CFA, Vice President of CFA Society Poland responsible for ESG, co-author of the report, said.

A study conducted on 140 of the largest Polish listed companies included in the WIG20, mWIG40, and sWIG80 indices at the end of 2019 showed that in the period 2010-2019 women remained a minority in the government.

The authors of the report also compared a number of financial ratios between companies with an extremely low and relatively higher share of women in the authorities. The ratios related to dividend payment, profitability, dynamics of revenues and profits as well as valuation and risk were compared. Two of the examined indicators showed significant differences. Companies with more women in the analyzed period were characterized by a higher net profit margin and lower volatility of share prices than the group of companies with the lowest share of women in governing bodies.

(WBJ)