There’s a Shocking Fact About Companies With More Female Leaders We All Need to Know

There’s a Shocking Fact About Companies With More Female Leaders We All Need to Know
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February 9, 2016
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A new study finds that companies with more women in top leadership positions also have higher profit margins.
After crunching data from a survey of 21,980 publicly traded companies from 91 different countries, the Peterson Institute for International Economics found that those with at least 30 percent of their “C-suite” (CEO, CFO and COO positions) composed of women had 6 percent higher profits than than those that didn’t.
“The correlation between women at the C-suite level and firm profitability is demonstrated repeatedly, and the magnitude of the estimated effects is not small,” researchers Marcus Noland, Tyler Moran and Barbara Kotschwar wrote.
The study, funded by EY, found no evidence that female CEOs, on their own, improved firms’ performances. It also suggested that female board members may help a company’s bottom line through a “pipeline effect” — more women on a board may mean more women in C-level positions — although the relationship was not found to be statistically significant.
According to 2014 data gathered by the study’s researchers from Reuters, 60 percent of companies have no female board members, 50 percent have no females in top executive positions, and only 4.5 percent have female CEOs.
Interestingly, the study found that quotas for female representation on boards had no effect on companies’ performances.
Industry-wise, the study found that women’s presence on boards was greatest in the financial, healthcare, utility and telecommunications sectors, and least in the sectors of basic materials, technology, energy and industrials.
Feature image via Jakob Montrasio
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