Send More Info
Apply Now
Classroom Login
Call Now
Call Now 855-300-1469

Women in C-Suite May Boost Profits, Study Finds

Fewer than 5% of companies have a female CEO and nearly 60% lack female board members.

By University Alliance on April 28, 2016
Study Links Female Execs to Higher Corporate Profits

Companies looking to improve their bottom lines should consider promoting women into corporate leadership positions. That’s the implication of a major new study that surveyed 22,000 firms worldwide.

The study by the Peterson Institute for International Economics, a Washington-based think tank, and EY, the audit firm formerly known as Ernst & Young, found that increased gender balance in corporate leadership is associated with higher stock values and greater profitability.

Nevertheless, many companies don’t have women in C-suite positions, including the most senior executive positions such as chief executive officer, or CEO. The study found that a little more than half of companies have no female C-suite executives at all. Fewer than 5% have a female CEO. Nearly 60% have no female board members.

The report – titled Is Gender Diversity Profitable? Evidence from a Global Survey – found that firms where 30% of the leaders are women could expect an approximate profit boost of 15% compared with firms that had no female leaders.

The study also found that an extensive representation of women is more impactful than a single female CEO. While having a female chief executive had no noticeable effect on a firm’s performance, companies with a large proportion of female execs showed significant gains.

The February 2016 report emphasized the importance of creating a pipeline for female managers, noting the strong correlation between gender diversity and national policies for women’s education and family leave. Policies that encourage gender diversity from elementary school through the child-bearing years tend to result in greater diversity in the business sector. 

Another important factor is the absence of discriminatory attitudes toward female executives. Here, researchers say, the United States has much work to do.

A 2015 survey from the Pew Research Center found that 43% of people believe that women are held to higher standards than men and must do more to prove themselves when it comes to reaching the C-suite. A similar number of respondents said companies are not prepared to hire women into executive positions.

As for reasons that female employees aren’t climbing the ladder to the C-suite, 23% of respondents to the Pew survey said women don’t have enough time because of family commitments. About 20% said women don’t have enough connections, while fewer than 1 in 10 respondents said women aren’t tough enough or accomplished enough managers.

Category: 2016 Headlines