Career Testing
Career Testing
Career Testing
LEADERSHIP / SEP. 30, 2013
version 4, draft 4

Female Bosses Equal Better Company Profits

There has been much debate in recent years about the appointment of women in organizations’ boardrooms. The figures are disappointing as they indicate that the representation of women on UK boards has stalled. But what comes to surprise us is the fact that firms which employ a higher number of female executives will likely make more money, research suggests.

This is true! A recent report found that companies where women amount to a third of board members made on average 42% more profit, whereas shareholders had 53% higher returns. Moreover, Sodexo compiled encompassing research on diversity at work and revealed that hiring more women in executive roles enhanced a business’s performance.

Tokenism appeared not to be an ineffective method and firms need to employ multiple female managers in order to benefit. Indeed, women shouldn’t be appointed to board positions based on the quota logic or mere ‘tokenism’. It is time for employers to grasp the real value that a diverse boardroom can bring. It is important that we see a change in culture but in order for this to happen, businesses should recognize that knowledge and experience from different backgrounds can be incredibly valuable to a firm's success.

Figures point out that the number of women in Britain’s boardrooms has grown from 6.2% in 1999 to 17.3% this year, among the companies listed on the FTSE 100. Burberry has the highest proportion of female directors on its board with three out of eight, including chief executive Angela Ahrendts.

The results speak of themselves! The most productive businesses were those with mixed gender boards. Increasing female presence in organizations’ executive boards is no longer a stereotype. On the contrary, it is an essential practice for every company to adopt. By welcoming different perspectives and sharing cross-sector knowledge, businesses have the potential to gain a real competitive edge.

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