Three Case Studies Proving That Diversity Can Make You More Money (in Case Anyone Still Cares)

The studies below highlight the significant long-term financial benefits of maintaining diverse leadership teams, including board positions. The data strongly supports the business case for gender diversity and inclusion in companies where this is a long-term focus and an integral part of their strategic business goals.

Who cares??? You might ask yourself, especially since you could probably cite many examples where the opposite could and probably is true. In fact, I for one, have an (ex-client) who runs their business with the gumption and devil-may-care attitude of a 19th-century ground owner with 6 healthy sons from as many mothers. And they make money. Quite a lot of it, actually. Leaders in their market, blah blah. The fact that their specific niche industry more or less floated in on Noah’s ark with the edible mammals might or might not be of consequence. I am also ready to bet that they will eventually (yes, eventually) go the dinosaur route, but let’s look at a few recent examples where one could say (at least in more progressive circles) they got it ‘right.’

1. Sodexo 

   Sodexo, a global food services and facilities management company, conducted a five-year, one-of-a-kind study of 70 entities across different functions representing 50,000 managers worldwide. Their findings showed that gender-balanced teams—defined as having 40%–60% women to men—enjoyed significant benefits:

• Operating margins: Significantly increased
• Employee retention: 8 percentage points higher
• Client retention: 9 percentage points higher on average
• Employee engagement: 14 percentage points higher
• Safety: Number of accidents decreased by 12 percentage points
• Future target: Committed to reaching 40% women in senior leadership by 2025, with 10% of bonuses linked to this metric

2. Microsoft 

   Microsoft serves as a prominent example of how a strategic focus on diversity and inclusion (D&I) can yield significant business outcomes, as can be seen in their most recent report. 

   They have integrated D&I as a core element of their organisational strategy over the past 10 years, tracking and reporting on progress. Data from Microsoft’s D&I reports show that their commitment to D&I can be linked to positive economic results.

   According to their reports, (which, if they follow in the footsteps of a few other large corporations, at the time of going to press might have disappeared off the world wide web..) investing in diverse talent, particularly in leadership and technical roles, Microsoft has created a more inclusive work environment while simultaneously driving key economic factors such as innovation, productivity and market expansion. 

   Since 2019, their global workforce has expanded by 54.1%, with the representation of women increasing by a whopping 74.7%! They found that diverse teams are often more creative and better at problem-solving, leading to the development of new products, services and processes. Innovation is a clear driver of economic growth, especially in a company such as Microsoft, where innovation drives market share and new product development.

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3. Heineken

   Heineken's efforts to promote gender diversity within its leadership ranks have yielded significant benefits in terms of economic growth and corporate performance, according to Diversity Atlas.

   
   For example, in 2023, women held 28% of senior management positions at Heineken, a steady increase from previous years. Their aim is to achieve 30% female representation in senior management by 2025 and 40% by 2030. 

   According to Diversity Atlas, Heineken N.V.’s financial results for the fiscal year 2023 underscored the effectiveness of its strategic focus on diversity as a driver of economic performance. The company reported a net revenue (bei) of €30,308 million, a 5.6% increase from the previous year. 

   Despite major global economic challenges, Heineken achieved an operating profit of €4,443 million, which translates into an operating profit margin of 14.7% and a net profit of €2,632 million.

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Underscoring the above case studies, Credit Suisse reported (in 2021) that for the previous ten-year period, companies with above-average percentages of women in management and on boards (over 20 percent and 25 percent, respectively) showed higher share price returns than companies with less gender-diverse leadership. For example, the stock of companies with more than 20 percent women in management returned an annualized 9.7 percent between 2010 and 2021 year-to-date. 

The stock of companies with less than 15 percent women in leadership returned an annualized 7.5 percent during the same period. Yes, you might argue, that could simply be a result of ‘flavour of the month’ stuff! 

Nope – read on: The data also shows an impact on margins. “Comparing the average margin since 2010 for companies with over a 20 percent diversity threshold with those below 15 percent reveals a premium of 1.6 percentage points. If we lower the threshold to less than 10 percent, the gap is wider still,” according to Credit Suisse.

Recently, Deutsche Bank CEO Christian Sewing said the company stands “firmly behind” its “integral” DEI programs, as they can “see how Deutsche Bank has benefited from it”. Must be a nice guy, this Christian. 

The experts tell me that change only happens on emotional buy-in and not because of any statistical evidence, in other words, unless leaders have empathy for the underrepresented demographic in their environment, the facts will not move them to action, even if they do want to make more money and the facts tell them they could be more efficient and innovative if their leadership team is more diverse…In short, they need to care!

Written by: Leonie Pentz O’Connor, Global Sustainability Lead