More Female Bosses Equal Higher Profits?

research

 

Valentina Zarya, associate editor for the Most Powerful Women channel on Fortune.com, published this article in February of 2016. 


quotes & Notes

The first is that there is evidence that the presence of women contributes to functional or skill diversity among the leadership group enabling top management to more effectively monitor staff performance. The other is discrimination: If some firms discriminate against talented, hardworking, effective women, then they will be outperformed by rivals that don’t discriminate.”
- Marcus Noland, EVP and director of studies at the Peterson Institute
“It stands to reason that policies that allow child care needs to be met but do not place the burden of care explicitly on women increase the chances that women can build the business acumen and professional contacts necessary to qualify for a corporate board,”
- Study published by Peterson Institute for International Economics

According to the PIIE Study, Gender-neutral family leave will cut off the employers expectation that men will provide greater returns to training and mentoring than women. In addition, firms with policies that place a disproportionate burden of childcare hinder a women's corporate advancement.


Statistics

The firm with more women can expect a 6 percentage point increase in net profit, while overall median net profit was just over 3 percent.

Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.

Fortune 500 Companies with at least three female directors have 42% higher return on sales, 53% higher return on equity, and 66% higher return on invested capital.


Visuals

 
Published by McKinsey & Company

Published by McKinsey & Company

 
 
 
Published by Catalyst

Published by Catalyst

 

SOURCES 

  1. 'Is Gender Diversity Profitable? Evidence from a Global Survey' The Peterson Institute for International Economics (PIIE) published a series of working papers in February 2016. 
  2. 'Why Diversity Matters' McKinsey & Company released a report in January 2015. Over the past several years, McKinsey has examined workplace diversity in over 300 public companies worldwide. 
  3. 'The Bottom Line: Corporate Performance and Women's Representation on Boards' Catalyst published an article focused on women's representation in Fortune 500 Companies.