How should we interpret the financial performance results of the indexes created for SHE, EQUL and WOMN? Should we take these as evidence that gender inclusion is just not that important? Not so fast. We think that what is needed is different kinds of data, and that with such data, it would be much easier, and far more compelling, to make the case for more equitable gender inclusion.
Over the last five years, we've taken a deep dive into employee sentiment at all levels of a company. We have curated data across thousands of companies where hundreds of thousands of respondents have answered questions about their day-to-day experience. These queries primarily focus on measuring the levels of previously intangible attributes within an organization such as psychological safety, levels of trust, perceived fairness, a sense of appreciation and more.
We codified these findings in what we call the Human Capital Factor. The results were quite profound, showing companies that scored higher on these hard-to-measure characteristics consistently outperformed the market.
We went deeper to look at the responses of these attributes by women and men. The result is a framework to measure the core emotive building blocks of the relationship between employees and their employer through a "gender lens."
These findings gave specific insight into whether women throughout an organization feel they are treated equally. Within outperforming organizations, we found much higher "alignment" (smaller gaps) between the responses given by women and those given by men. Conversely, a material gap between the answers of men and women was a signal suggesting a drag on future company stock performance. Importantly, this analysis tracked gender sentiment across all levels of an organization, not just in the board room or C-suite.
When we compare the market performance of companies that score high on gender alignment (the top 100-plus with the smallest gap between female and male responses across 30-plus key attributes) vs. the Russell 1000, we see meaningful outperformance: