Does Ethnic Diversity on Corporate Boards Affect Stock Prices?
But how does diversity in the boardroom affect financial performance? A new study by Calvert Research and Management, a unit of Morgan Stanley Investment Management, has some answers.According to the study, which analyzed more than 800 large-cap companies in the United States, United Kingdom, Canada and Australia from 2012 to 2020, companies with greater board diversity may in fact be better stock picks.“Our research suggests that using racial and ethnic board diversity factors can improve U.S. large-cap equity stock selection,” says Yijia Chen, ESG Quantitative Research Analyst and Index Manager at Calvert, who wrote the report. “There may be additional benefit in tilting toward more diverse companies across all four developed markets.”
Does ethnic diversity on corporate boards affect stock prices?