Cut the Fluff: 7 Undeniable Stats Why Women at the Top Grow the Bottom Line
By Erin O'Connor | Tue Mar 02 2021
Leading up to International Women’s Day (March 8), we wanted to honor women executives and managers by sharing seven compelling statistics that should get even the slowest of companies to change and encourage everyone to find ways to promote or put women into leadership at their companies. We were so moved by these facts that
we built our entire investment strategy around it:
1. 20% Better Annual Returns:
Gender-balanced senior investment teams in private equity and venture capital funds outperform all-male teams by 20% in annual returns. LINK
2. 50% Higher Profitability:
Where women made up at least 15% of senior managers, companies had more than 50% higher profitability than those where female representation was less than 10%. LINK
3. 38% Increase in Revenues from Innovative Products:
In one study, companies that had higher diversity in management earned 38% more of their revenues, on average, from innovative products and services than those companies with lower diversity. LINK
4. 65% of Household Purchasing Power:
Women control 65% of global household spending and an estimated global consumer spending of about $40 trillion.LINK
5. >50% Better at Launching Companies:
Startups founded by women receive only half as much capital from investors, but for every dollar of funding, women-led startups generated 78 cents compared to just 31 cents generated by male-founded startups. LINK
6. 10% Increase in Inclusion Improves Absenteeism:
When employees feel they are part of a diverse and inclusive environment, even a small increase of 10% in these perceptions improves absenteeism at a company, which adds a day a year per employee.LINK
7. 37.9% Better Assessment of Customers:
When organizations have inclusive business environments, they’re 37.9% better at assessing their customers interests and demands.LINK
Some think RENEW is investing in the most challenging companies, in the most challenging countries in the world. Maybe we are; if it was easy everyone would be doing it. We’re constantly testing new processes to improve our investment playbook, and searching for new strategies to improve performance. In 2019, we made one of the best and most obvious decisions that every fund manager should be making, given the overwhelming data that has recently come out: Going forward, every company we invest in, we will work to build gender-balanced executive teams. We were cautious about this decision because we didn’t want to sound like we were pandering to the development community, which has been advocating for this type of pivot from firms like ours for years. But the data made it clear, and we had first-hand experience of the power of a gender-balance at our own firm. So the decision was simple: now we need to execute.
At RENEW, we’re working hard to walk the walk. We have 38% of women in executive leadership roles at our firm, 45% of RENEW’s team consists of women, our portfolio supports 2,288 women employees, we have trained 51 women executives through our CFO100 and Exec’s program, and we’re hell-bent on moving the needle in Africa to build world-class companies that have gender-balanced exec teams at the top to grow the bottom line!
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.