The Swiss investment bank’s survey of around 3,400 companies found those where women made up at least 25% of senior management had annualized stock-price returns of 22.8% over five years, beating an 11.7% return on the MSCI All Country World Index.
Shares of companies where women made up at least 33% of senior management roles posted an even better 25.6% return, while those where more than half of senior managers were women posted a winning 28.7% return.
“With regards to business performance, we find clear evidence that companies with a higher participation of women in decision-making roles continue to generate higher returns on equity, while running more conservative balance sheets,” Urs Rohner, Credit Suisse Chairman, and Iris Bohnet, a professor at Harvard University, said in the report.
“In fact, where women account for the majority in the top management, the businesses show superior sales growth, high cash flow returns on investments and lower leverage.”
Companies were also found to perform better if they had a woman in the top job. Businesses with a female CEO were valued by the market at a 19% premium on a price-to-book multiple. These companies also achieved a 19% higher return on equity, on average, and had a 9% higher dividend payout.
Despite all these apparent benefits, women are still under-represented in senior management positions.
Credit Suisse found that since it conducted a similar survey in 2014, the proportion of women in top jobs at the 2,400 companies common to both the 2014 and 2016 survey had risen slightly to 13.8% from 13.6%.
There was a much larger improvement in boardrooms, with females comprising 14.7% of directors at the end of 2015, up from 13.7% at the end of 2014 and 9.6% at the end of 2010.
Credit Suisse said the discrepancy could indicate that some companies are engaging in “overboarding” to meet gender diversity targets, reducing the talent pool of women for senior management roles.
“This is particularly important as female CEOs—in our sample, these represent a mere 3.9%—often promote women and help shape the much needed talent pipeline,” Rohner and Bohnet said.