Profit through parity

Companies with more female leaders are more profitable

Facebook COO Sheryl Sandberg (REUTERS/Stephen Lam)

A new study conducted by EY and the Peterson Institute for International Economics has found that having women in at least 30 percent of leadership positions adds 6 percent to a company’s net profit margin. The study analyzed results from 21,980 global, publicly traded companies in 91 countries from various industries and sectors in 2014, tracking women CEOs, board members, and members of C-suite, a term that refers to a company’s most important senior executives. The study found that female CEOS do not systematically outperform male counterparts, and that female board members, while associated with greater profitability, did not produce statistically significant differences in results. For C-suite, however, the results were striking: having more women was clearly associated with higher profits.

The study also found that quotas to mandate female representation on boards did not reduce or improve corporate performance. 60 percent of the companies studied had no female board members, 4.5 percent had female CEOS, 3.8 percent of board chairs were female, and just over 50 percent had no female leaders. Feminists hope the study’s results will lend credence to the idea that gender parity in business is not just about fairness, but also better results.

Read the full story at Quartz.

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