When you want to invest to the company, you can look at a countless number of indicators that predict great financial result. There are sales figures and profits, the high-quality of product lines, and even the talent set of the company’s workforce. But there’s one key thingt that some would possibly overlook: the gender of those in charge. Do female executives perform better?
A Woman’s Impact
According to a number of studies in current years, there is increasing proof that women in executive positions and on company boards can have a positive impact on a company’s performance.
A more various C-suite, these research conclude, is related to higher margins, larger profits, and better total return to shareholders.
“We find clear evidence that companies with a higher proportion of women in decision-making roles continue to generate higher returns on equity. While running more conservative balance sheets,” according to a 2016 report from Credit Suisse. “In fact, where women account for the majority in the top management. The businesses show superior sales growth, high cash flow returns on investments, and lower leverage.”
Why female executives is important
Why does gender diversity in the C-suite seem to make a difference in a company’s performance? The causation is not entirely clear.
Aalthough most research agree that introducing new voices into management roles can carry a fresh point of view. And also that women executives have access to different pipelines of qualified employees.
Additionally, the research also note that because women often have a harder path to management roles, those that do arrive there are among the most talented.
Based on TheBalance, Nordea speculated that companies who are already doing well may be more willing to hire a female executive. On the pther hand, struggling companies may prefer to make the “safer” choice and hire a man.
But, Nordea said, “It could also be that women are better managers. Women may also be more careful in their projections than men so that when they actually deliver on what they promise, it has a positive effect on the share price.”
Obviously, the gender of executives in the C-suite and boardroom should not be the only factor to consider. Mostly, when looking to invest in a company. But there is sufficient evidence to suggest that it can play a positive role. Moreover, in boosting corporate performance and potentially put more money in the pocket of shareholders.
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