At least, that’s the lesson implicit in a November 2015 report from MSCI, a New York City-based research-based index and analytics firm. Companies with “strong female leadership” generated an average return on equity of 10.1 percent per year, compared to an average of 7.4 percent for those without top women leaders.
The study, which examined more than 4,200 companies between December 2009 and August 2015, is in sync with a September 2014 report from Credit Suisse that also found a link between companies with more female executives and higher returns on equity—as well as higher valuations, stronger stock performance and higher payouts of dividends.
The Credit Suisse report was based on a database that tracks the gender mix of about 28,000 executives at 3,000 companies in 40 countries. Diana Bilimoria, KeyBank Professor and Chair of Organizational Behavior at Case Western Reserve University’s Weatherhead School of Management, isn’t surprised. “Our organizations need women leaders,” she said. Ample research, she added, “shows a correlation between the presence of women in top governance and leadership roles and organizational performance, philanthropy, and corporate social responsibility.
Research indicates that women leaders use more transformational leadership styles and are more communal—that is, concerned about developing and supporting individual employees and the team,” she said. “These are the elements of being a more-inclusive leader.” Despite evidence that having more female leaders is a recipe for business success, female CEOs are still in the minority. According to Boardroom Insiders, a San Francisco company that maintains a database of in-depth profiles of C-level executives, only 19 of the Fortune 500 CEOs (3.8 percent) in 2015 were women. Other Fortune 500 C-suite positions have a greater percentage of women, including chief financial officers (10 percent) and chief information officers (16 percent), but women are still, by far, the minority in these leadership positions.
“We are making progress, but it is slow,” Bilimoria said. “At the current rate of progress, it will take a very long time—literally decades—before equity is achieved. The reasons for this slow change are complex and involve societal, organizational, interpersonal and individual reasons.”
Source :- Society for HR Management(Mumbai)
Date :- 11th January,2016