January 26, 2016

Studio shot of a fish in bowl

Do women in business impact the bottom line? Yes.

Okay, now what?

This 31-page research report, published in November 2015, indicates that yes, indeed, more women leaders equal more profit. More than 4,000 public companies across the globe were included in this study. I sifted through the tantalizing write up so you don’t have to dig for the gold. Here’s the gist:

Companies with strong women leadership perform better.

How much better?

Companies that had Strong Female Leadership generated a Return on Equity of 10.1% per year vs. 7.4% for those without.

Ok. So let’s define ‘Strong Female Leadership’. To have this status, one of these must apply:

The company has three or more women on the board, the percentage of women on the board is above its country’s average or the company has a female CEO and at least one women on the board.

What other nuggets of interest were found?

Companies without Strong Female Leadership have more governance controversies such as cases of bribery, corruption and fraud.

How much more? 24% Twenty. Four. Percent.

Strong Female Leadership is not connected to either greater risk aversion or better risk management.

There were no links to board gender diversity and aggressiveness. (This might surprise some folks.)

These findings are great for women … right?

Yes. Sure, it’s a great start in demonstrating that companies with Strong Female Leadership perform better and therefore companies should have more women in leadership positions. Yet, although it’s growing, Strong Female Leadership is still hard to find. Female directors comprise only 18.1% of all directorships (worldwide). At the current pace, only 30% of directorships will be women by 2030. It could be *slightly* accelerated if there are more board positions created and the turnover rate increases.

If more women leadership equals more profit, what company wouldn’t want more women in leadership? Great question. Wink.

How do we accelerate the pace of women gaining leadership positions?

Well, here’s a thought-starter:

Men currently run the world. Hands down, they hold the global power and influence both politically and economically.

To start, we need more men to support and mentor women into positions of leadership because men have the tickets to those board seats and CEO positions.

But that’s not all.

Because women leaders contribute to stronger return on equity, men in leadership could learn a thing or two from these strong female leaders.

In fact one study of 64,000 people in thirteen nations concludes that two-thirds of those studied believe the world would be a better place if menthought more like women.

So maybe what we need is an exchange of mentorship.

A wo(men)torship. An equal opportunity value exchange.

I realize it’s not this simple. But it is a strategy based on the facts and performance at hand.

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