Companies with more culturally diverse boards are outperforming those with lower diversity figures by a significant margin.
A report based on financial market data provider Refinitiv’s ESG data has revealed that companies with cultural diversity on the board have much higher portfolio total returns.
Measured over five years, the portfolio total return for companies across the globe with 90% board cultural diversity came in at 138% compared to just 79% in companies with less than 10% board cultural diversity.
Broken down into how FTSE companies compare, this data was even more dramatic.
FTSE All World companies with more than 90% cultural diversity on the board saw a 261% portfolio return over five years. This is compared with a return of just 92% for those with cultural board diversity of less than 10% resulting in a 169% difference.
The results are part of a wider report by Refinitiv into diversity & inclusion in a post-Covid world.
The report found that, apart from cultural diversity, the other major issue currently facing companies across the globe when it comes to D&I is how they are managing the transition back to the office or hybrid working.
Employee satisfaction, childcare services and flexible working hours were the three key elements highlighted as crucial for a successful transition of staff either back into the office or into a new hybrid working model.
The report stated: “Now, as many companies are considering or starting to encourage employees back to the office, some previously neglected inclusion and people development metrics might become top of mind for management teams.”
The number of companies offering flexible hours increased from 1,269 in 2016 to 3,047 in 2020. The number of firms offering childcare services jumped from 715 in 2016 to 1,099 in 2020. The result of these shifts in culture saw a leap in average employee satisfaction from 75.5% in 2016 to 80.10% in 2020.
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