Shares of companies with greater gender, ethnic and racial diversity can produce higher returns for investors, according to Bank of America.
The bank said in a report published last week, ahead of International Women's Day, that its environmental, social and governance team had found that S&P 500-listed companies with above-average gender diversity on their boards saw a 15% higher return-on-equity, compared to firms with less diverse boards.
Meanwhile, BofA found ROE was 8% higher for companies in the S&P 500 with a more ethnically and racially diverse workforce, compared to less diverse firms. ROE is a measure of profitability that is calculated by dividing net income by shareholders' equity. With that in mind, BofA listed the 10 global stocks scoring highest on Refinitiv's 2020 Diversity & Inclusion index:
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Pro It could be that bigger companies have more money to waste on HR / diversity programs etc. and so you're putting the cart in front of the horse.