Markets

How Gender Diversity Enhances the Bottom Line

Published

6 years ago

January 23, 2018

Jeff Desjardins

How Gender Diversity Leads to a Bigger Bottom Line

Despite making up half of the population and 47% of the labor force, women remain highly underrepresented in the top echelons of business.

5% of the richest billionaires are women
6% of S&P 500 companies have women CEOs
20% of Fortune 500 board members are women

There are many arguments that can be made for closing this gender gap, but the most compelling one is very simple: there’s a growing body of research that shows that gender diverse companies make more money.

Women and Profit

Today’s infographic comes to us from Evolve ETFs, a company that has launched an ETF focused on gender diversity, and it shows that companies with more women in senior roles are making better decisions and ultimately higher profits.

Better Decisions
The more diverse a team is, the more likely it is to make the best business decision. Logically, this makes sense, since multiple perspectives are considered this way – and groupthink can be avoided.

There have been various studies on decision-making that show this, but one compelling example highlighted by Forbes covers 600 business decisions made by 200 different teams over a two year span. This research found that more diverse and inclusive teams made better decisions up to 87% of the time, took less time to make the decision, and delivered 60% better results.

Better Bottom Line
Not surprisingly, making better business decisions leads to bigger returns, as well. Credit Suisse, for example, found that boards with more women had a 36% higher return on equity.

Meanwhile, research from Morgan Stanley found that the top-third of companies (that hire the most women) had 2% higher equity returns than average.

A final study worth noting is from The Peterson Institute for International Economics, a Washington, D.C. think tank, which shows that companies with at least 30% female leaders end up raking in 6% higher net margins.

Future Growth

On the company level, gender diversity means more profit and better decisions – but what could this mean in aggregate?

Global management consultancy firm McKinsey & Company offers up a rosy picture: they figure that if the gender gap is closed in their “full potential” scenario, up to $28 trillion extra could be added to global GDP growth by 2025.

Related Topics:stocks women diversity gender profits

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Economy

Economic Growth Forecasts for G7 and BRICS Countries in 2024

The IMF has released its economic growth forecasts for 2024. How do the G7 and BRICS countries compare?

Published

4 hours ago

April 24, 2024

Niccolo Conte

Faded horizontal bar chart visualization of G7 and BRICS countries' real GDP growth forecasts for 2024.

G7 & BRICS Real GDP Growth Forecasts for 2024

The International Monetary Fund’s (IMF) has released its real gross domestic product (GDP) growth forecasts for 2024, and while global growth is projected to stay steady at 3.2%, various major nations are seeing declining forecasts.

This chart visualizes the 2024 real GDP growth forecasts using data from the IMF’s 2024 World Economic Outlook for G7 and BRICS member nations along with Saudi Arabia, which is still considering an invitation to join the bloc.

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Mixed Economic Growth Prospects for Major Nations in 2024

Economic growth projections by the IMF for major nations are mixed, with the majority of G7 and BRICS countries forecasted to have slower growth in 2024 compared to 2023.

Only three BRICS-invited or member countries, Saudi Arabia, the UAE, and South Africa, have higher projected real GDP growth rates in 2024 than last year.

Group	Country	Real GDP Growth (2023)	Real GDP Growth (2024P)
G7	🇺🇸 U.S.	2.5%	2.7%
G7	🇨🇦 Canada	1.1%	1.2%
G7	🇯🇵 Japan	1.9%	0.9%
G7	🇫🇷 France	0.9%	0.7%
G7	🇮🇹 Italy	0.9%	0.7%
G7	🇬🇧 UK	0.1%	0.5%
G7	🇩🇪 Germany	-0.3%	0.2%
BRICS	🇮🇳 India	7.8%	6.8%
BRICS	🇨🇳 China	5.2%	4.6%
BRICS	🇦🇪 UAE	3.4%	3.5%
BRICS	🇮🇷 Iran	4.7%	3.3%
BRICS	🇷🇺 Russia	3.6%	3.2%
BRICS	🇪🇬 Egypt	3.8%	3.0%
BRICS-invited	🇸🇦 Saudi Arabia	-0.8%	2.6%
BRICS	🇧🇷 Brazil	2.9%	2.2%
BRICS	🇿🇦 South Africa	0.6%	0.9%
BRICS	🇪🇹 Ethiopia	7.2%	6.2%
	🌍 World	3.2%	3.2%

China and India are forecasted to maintain relatively high growth rates in 2024 at 4.6% and 6.8% respectively, but compared to the previous year, China is growing 0.6 percentage points slower while India is an entire percentage point slower.

On the other hand, four G7 nations are set to grow faster than last year, which includes Germany making its comeback from its negative real GDP growth of -0.3% in 2023.

Faster Growth for BRICS than G7 Nations

Despite mostly lower growth forecasts in 2024 compared to 2023, BRICS nations still have a significantly higher average growth forecast at 3.6% compared to the G7 average of 1%.

While the G7 countries’ combined GDP is around $15 trillion greater than the BRICS nations, with continued higher growth rates and the potential to add more members, BRICS looks likely to overtake the G7 in economic size within two decades.

BRICS Expansion Stutters Before October 2024 Summit

BRICS’ recent expansion has stuttered slightly, as Argentina’s newly-elected president Javier Milei declined its invitation and Saudi Arabia clarified that the country is still considering its invitation and has not joined BRICS yet.

Even with these initial growing pains, South Africa’s Foreign Minister Naledi Pandor told reporters in February that 34 different countries have submitted applications to join the growing BRICS bloc.

Any changes to the group are likely to be announced leading up to or at the 2024 BRICS summit which takes place October 22-24 in Kazan, Russia.