The study by S&P Global Market Intelligencegives great encouragement to appointing more female executives. During their research the scientists found that firms with female CFOs were more profitable and that companies with female CEOs and CFOs produced superior stock price performance, compared to the market average. In the 24 months post-appointment, female CEOs saw a 20 per cent increase in stock price momentum and female CFOs saw a 6 per cent increase in profitability and 8 per cent larger stock returns, the research team wrote. Over the 17-year period for the study, firms with female CFOs generated $1.8 trillion more in gross profit than their sector average.
The results showed that companies with a high gender diversity on their board of directors were more profitable than firms with low gender diversity. Analysis of executive biographies suggests that one driver of superior results by females may be that females are held to a higher standard as the research report states. According to S&P,the average female executive has characteristics in common with the most successful male executives, suggesting that common attributes drive success among males and females, alike. Overall, the attributes that correlate with success among male executives were found more often in female executives. This finding refutes the commonly held belief in ‘token’ female executives, the author of the study concluded.
“As we look at financial performance, this research is yet another confirmation that women provide significant and positive value through C-suite and board leadership positions,” Doug Peterson, president and CEO of S&P Global, said.
“The evidence is getting louder,” said Beatrice Grech-Cumbo, head of Korn Ferry’s Advancing Women Worldwide initiative. The study, she noted, builds on prior research indicating that organisations with more inclusive teams, such as women in leadership positions, get better performance from individuals, teams and entire organisations. Those diverse groups are more likely to produce innovative products and deliver them faster to the market than non-diverse groups.
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