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New Study Shows Women in Management Results in Higher Profits

New Study Shows Women in Management Results in Higher Profits
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Dora Wang

Dora is an employee engagement reporter for TINYpulse. When she's not busy digging into and covering the latest workplace trends, she's wrangling with her three (yes, three) cats and rooting for the Seahawks.

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The New York Times reports on a just-released study by the non-profit Peterson Institute for International Economics which shows that companies that want higher profits would be well served by getting more women into management. Nearly 22,000 publicly traded companies from 91 countries were surveyed in the study.

The study found no conclusive evidence, though, that a higher number of female CEOs or board members affect a company’s bottom line.

On the other hand, what the study did reveal was that having women in other top-management positions was definitively correlated with increased profits. According to Marcus Noland, the institute’s director of studies, “An increase in the share of women from zero to 30% would be associated with a 15% rise in profitability.”

While a Pew Research study released in 2014 showed that Americans consider women to be equally qualified for being business and political leaders, it’s obvious more needs to be done to actually make this happen.

  • Less than 5% of companies surveyed had a chief woman executive
  • 50% had no female executives at all
  • 60% of the companies had no women on their boards
  • 12% of American companies surveyed had female board members
  • 16% of their executives were female

Norway has the most diversity, with women in 40% of board seats and 20% of their executive positions. Japan was at the low end, with women only representing 2% of board members and only 3% of their executives.

One of the Peterson study’s tantalizing finds was that countries with high math scores in schools tended to produce more female business leaders. This was a far stronger profit indicator than legal quotas for female board membership such as those in Norway, Denmark, and Finland.

Surprisingly, the survey showed paternal leave contributed more to higher female leadership numbers than maternity leave, probably because it represents more sharing of child-rearing responsibilities. Overall, Noland says, “If you have a supportive set of policies, which would include paternal leave, which allows women to have children while maintaining their careers in a relatively undisruptive manner, you see more women making it to the very top.”

Dora Wang

Dora is an employee engagement reporter for TINYpulse. When she's not busy digging into and covering the latest workplace trends, she's wrangling with her three (yes, three) cats and rooting for the Seahawks.

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