Female representation in British boardrooms became heathier this week as two women were appointed as chief executives at Taylor Wimpey (TW.) and Pets at Home (PETS). They join Roisin Currie who was unveiled as the new boss at Greggs (GRG) in January and who will succeed the long-serving Roger Whiteside in May.

In one sense this is to be celebrated purely in the interests of equality and fairness. In an ideal world everyone would have the opportunity to go as far as their talent would take them regardless of their gender, background or colour of their skin.

This is not purely the responsibility of the business world – there are obviously societal factors which feed into this.

And should it matter to investors anyway? The two women in question, Jennie Daly at Taylor Wimpey (TW.) and Lyssa McGowan at Pets at Home (PETS), deserve the respect of being judged on their own merits.

McGowan looks an excellent appointment for Pets after the departure of the well-regarded Peter Pritchard and we discuss why in more detail in this article.

Daly also looks a solid appointment given her three decades of experience in the housebuilding and land and planning industries. However, there is research which suggests the simple fact of having women represented in the boardroom is correlated with better financial and stock market returns.

To quote the executive summary of a report published by the Financial Reporting Council in 2021, covering the period from 2001 to 2019: ‘Higher levels of gender diversity of FTSE 350 boards positively correlate with better future financial performance (as measured by earnings before interest, depreciation and amortisation margin), with the effect being the strongest after three to five years.

‘Better-performing firms experience greater benefits in terms of financial performance from gender diversity. Specifically, based on average EBITDA margin, our analysis shows that the top 50% of the sample of companies that had at least one woman on the board experienced higher levels of EBITDA margin after three years.

‘Likewise, FTSE 350 boards with well managed gender diversity contribute to higher stock returns and are less likely to experience shareholder dissent.’

There is logic behind this. While it would be easy to dismiss diversity targets as political correctness or a box-ticking exercise, by casting your net as widely as possible in the population you have the greatest chance of securing top talent.

A diverse leadership also means encompassing a broader variety of perspectives and experiences which can help businesses make more informed decisions and, particularly for consumer-facing companies, allow them to better understand the people purchasing their goods and services.

Real progress has been made in recent years in boosting the gender diversity in UK plc, even if there’s still plenty to do.

Where things really start to fall down is when it comes to ethnic diversity. According to survey of FTSE 100 companies by the Parker Review committee and Department of Business, Energy & Industrial Strategy published in 2021 only five ethnic minority directors occupy a CEO position, all of whom are men.

A sobering thought for those who see the advantages of top executives being representative of the wider population.

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