companies outperform

Female friendly boards help companies outperform

Find out which companies with female friendly boards outperformed on share price returns in 2017, and which ones didn't.

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Having more women on boards in 2017 appears to have helped some companies outperform on share market returns.

As the year draws to a close, six of the eight top 200 listed Australian companies with at least 50 per cent women on their boards have finished the year higher.

Most of those have actually seen their share prices outperform the S&P/ASX 200. The benchmark Index looks set to end 2017 up about 7 per cent to 6,069 points, which will be the highest it’s been since 2008.

While there are many reasons to explain variations in share price performance, gender diversity on boards is one factor that more professional investors are looking at and it’s certainly an area that has gained significant attention over the course of 2017.

Fortescue Metals Group and Medibank Private are the only two companies listed in the top 200 on the Australian share market which have at least five women on their boards, and which also have a 55 per cent gender weighting in favour of women.

But over the past 12 months, the share price performance of both Fortescue and Medibank has been the complete opposite.

Fortescue shares are down about 16.8 per cent to $4.90, while Medibank shares are up 17 per cent to $3.30 over the same period.

There are six other companies which have a 50 per cent male to female board ratio and they include Boral, Mirvac, Woolworths, Nine Entertainment, Super Retail Group and BT Investment Management.

Of those, five companies saw their share prices gain over 2017. The best performing for the year was Nine Entertainment shares, which jumped 49.25 per cent to $1.58, followed by Boral shares up 45.5 per cent to $7.87.

Woolworths shares rose 13.3 per cent to $27.35, Mirvac added 9.2per cent to $2.38 and BT Investment Management shares gained 6.35 per cent to $11.35.

The worst performer was Super Retail Group shares down 19.2 per cent to $8.32 in the 12 months to December 28, 2017.

The Financy Women’s Index found that the number of female board appointments lost momentum in the June quarter and failed to build on the pace of improved diversity achieved in 2016. Although it must be said that this is typically not a high churn activity.

A report released by the Australian Institute of Company Directors shows that the number of women on ASX 200 boards hit 26 per cent this year, a record high.

The AICD’s Quarterly Gender Diversity Report found the number of boards with no women has fallen almost 75 per cent – from 30 boards in 2015, to 16 this time last year, to now just eight.

The number of boards that have reached or exceeded the AICD’s 30 per cent gender diversity target for ASX boards has also doubled, from 35 in September 2015, to 70 at the end of November 2017.

Yet while gender diversity has hit new highs, the drop in female appointments over 2017 means the AICD’s target of achieving the 30 per cent female representation across ASX 200 boards by the end of 2018 may be slipping out of reach.

The monthly appointment rate of women to ASX 200 boards has fallen from a peak of 44 per cent last year to 35 per cent in 2017.

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