Understanding the Effects of Gender Equality on Company's Performance: A Global Mid-Cap Companies' Perspective

The present study is conceived with the objective of assessing gender equality measures in mid-cap corporations and analysing the influence on company's performance. Based on gender equality scores of top 50 companies from Equileap's 2022 gender equality list; financial performance data from annual reports; and corporate responsibility scores from Sustainalytics, this study reveals that mid-cap companies fared poorly on all gender equality metrics and does not completely embrace gender equality. Less than 50% of women directors are found on the boards of 70% of mid-cap corporations. Women represented only 42% of company board of directors' positions and 32% of the executive leadership positions. A mean pay gap of 13.54% is observed in 85% of the mid-cap companies. Gender equality accounted for 26% variation in the mid-cap firms' financial performance. Initiatives to promote gender equality though do not affect the responsible behaviour of the mid-cap firms. Novelty of the study lies in testing the gender equality claims of mid-cap companies labelled as ‘top gender equal’ organisations across different sectors and ascertaining the influence of board's gender equality on firm's financial performance and responsible behaviour. The study makes a unique contribution to gender equality literature by proving that financial indicators are not enough to motivate corporate to truly embrace gender equality. Neither aspect like flexible working, training and work–life balance can be projected as the only measures for solving the issue of gender inequality. Results also contribute to social justification theory's literature by highlighting the fact that the theory promotes the ‘social stability’ or ‘status quo’ more than advancing the ‘social change’ when applied in the context of gender equality.