More than a century has gone by since Emmeline Pankhurst founded the Women’s Social and Political Union in 1903, leading the suffragette movement to obtain voting rights for women in the UK. Today, after years and years of fights and protests, women have undoubtedly made great achievements towards gender parity from a social and political point of view. This cannot be said though with regards to the labour market. Women in industry are still poorly represented and often suffer from worse contractual conditions and fewer opportunities than their male counterparts. 

This is why gender balance is a topic we take very seriously in ELITE. We believe it is not just an important ESG objective but also, as many indicators suggest, one that goes hand in hand with economic development and business growth. We therefore push our companies to embrace gender parity, starting with their board members, directors and managers.

 ELITE Mediocredito Italiano Lounge IV. Source: ELITE. 

At ELITE we recently committed to supporting the growth of female entrepreneurship, through access to tools, resources and finance, by signing the HM Treasury Investing in Women Code. As part of this initiative we have appointed a senior leadership team member to promote equality in all our interactions with entrepreneurs and help improve the potential for female entrepreneurs to grow their businesses successfully.

Parallel to signing the Investing in Women Code, on 17 July ELITE launched Mediocredito Italiano Lounge IV in partnership with Mediocredito Italiano – Gruppo Intesa San Paolo. This cohort consists of 20 companies, in every one of which a female entrepreneur plays a powerful role. It perfectly reflects ELITE’s commitment to supporting women managers and gender parity in general.

Looking at the data

In ELITE we pride ourselves on our network’s consistent economic achievements. And we have used data from over 900 member companies of the global ELITE network to produce relevant metrics that quantify these achievements. As shown in Figure 1, over the last three years ELITE companies have performed more than four times better than the average European SME. 

Figure 1: Comparing data from MSCI Small Cap Europe (995 companies) for annual performance (2016, 2017, 2018) with the average ELITE Return on Equity over the last three years (933 ELITE companies considered). Source: ELITE data and msci.com/documents/

This impressive figure becomes even more interesting when we take into account the proportion of female managers and directors in the firms. As data from ELITE companies suggests, a higher percentage of women in senior management positions indicates a higher average performance – both in terms of financial return, as shown in Figure 2, and employee numbers growth (Figure 3). 

ELITE companies where more than 30% of managers and directors are female maintain a 7% higher annual average Return on Equity and an employee growth rate twice as high as the ELITE average. Such impressive results clearly denote a benchmark which we will encourage all ELITE companies to target. 

The presence of women in managerial roles is a metric we will continue to monitor in order to evaluate the maturity of companies. This indicator will also become increasingly important from the investor’s point of view as ESG compliance and alternative criteria become crucial elements in investment decisions. Companies wanting to raise capital will therefore need to commit to increasing the percentage of women employees, with a particular focus on management roles.

Overall, the share of women on company boards has been steadily increasing over the past few years, as reported by the European Commission (Věra Jourová, Gender balance on corporate boards, 2016). In ELITE we are excited that light has been shed on female entrepreneurship, and as a network we will continue to work along with our companies to maintain this trend in the years to come.

Take a look below! 

 Figure 2: annual Return on Equity of ELITE companies with more than 20, 25 and 30 per cent female managers and directors (average over the last three years). Source: ELITE data.