Tag Archives: Jenna Lyons

Companies With More Women Leaders Are More Profitable, According Huge New Study

Advocates for gender have always argued that equality is not just about fairness, but also about better business results. Now this theory is being strongly supported, with new data from the Peterson Institute for International Economics and EY.

The groups analysed results from 21,980 global, publicly traded companies, in 91 countries from various industries and sectors and showed that having at least 30% of women in leadership positions, or the “C-suite,” adds 6% to net profit margin.

Marcus Noland, director of studies at the Peterson Institute, told Quartz magaizine.

The evidence on women in the C-suite is robust: no matter how we torture the data we get the same result: women in the C-suite are associated with higher profitability.”

The study looked at women in three positions: CEO, board members, and members of the C-suite. It found female CEOs do not systematically outperform their male counterparts. While there is some evidence that female board members are associated with greater profitability, the results are not statistically significant. But the C-suite results were clear: more women translated to higher profits. And Noland argues that having more women on boards is associated with having more women in leadership, otherwise known as the “pipeline effect.”

Having women leaders happened in companies which were bigger, in countries where women did well on math assessments vis a vis their male counterparts, and where there was a relative absence of discriminatory attitudes.

Surprisingly, countries that provide mandated maternity leave do not have more female leaders. But those with more paternity leave do.

It stands to reason that policies that allow for child care need to be met, but do not place the burden of this care explicitly on the woman, can allow women to have a greater chance of building business acumen and professional contacts necessary to advance to a level at which they would be invited to be part of a corporate board.”

Laura D’Andrea Tyson, an economics and business professor at the Haas School at the University of Berkeley, told a panel at the 2016 World Economic Forum that the gender parity debate is wrongly focused on fairness. Women, she argued, improve innovation and complex decision-making.

We have failed to make the business case.”


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