Based on its analysis of more than 1,000 public companies, Moody's identified a positive correlation between more board gender diversity and higher credit ratings.
Moody's managing director Atsi Sheth elaborated:
Our examination shows a positive relationship between board-level gender diversity and a company's credit quality. However, we don't view this correlation as causational. There may be a range of other factors that explain why boards of higher-rated companies have greater gender diversity.
Companies ranked highest by Moody's have the most gender diverse boards - averaging 28% female representation on the board, as compared to Ca-rated (nearly the lowest possible rating) companies, which average less than 5% female board representation. Board diversity also factors into Moody's new corporate governance ratings framework, which we recently reported on here.
See Bloomberg's "Credit Risk Is Higher at Companies With Fewer Women Directors," and additional information & resources on our Board Diversity and Board Practices/Governance Practices pages. This post first appeared in the weekly Society Alert!