London-listed companies are more profitable when women make up more than one in three executive roles, according to new research. Furthermore, the really good news is that listed firms where at least one-third of the bosses are women have a profit margin more than 10 times greater than those without.
OGN Daily has recently reported on the relative merits of female leadership during the pandemic, such as Female Leaders More Successful in this Crisis, but this new report firmly indicates that female executives (and culturally diverse boards) are very good news for companies too.
According to gender diversity business The Pipeline, of the 350 largest companies listed in London, just 14 are led by women. 15% of companies in the FTSE 350 have no female executives at all. The group's co-founder Lorna Fitzsimons said having more women in the decision-making room means businesses are better able to understand their customers.
The Pipeline's Women Count 2020 report "shows the stark difference in net profit margins of companies that have diverse gender leaderships compared to those who do not," she said.
The Pipeline says London-listed companies with no women on their executive committees have a net profit of 1.5%, whereas those with more than one in three women at that level reach 15.2% net profit margin.
The report also points out that in the largest 100 London-listed companies, the total number of female chief executives is the same as the number of bosses named Peter - six. When it comes to chief financial officers in those firms, fewer than two out of 10 are women, while men make up 96% of investment managers.
Former Prime Minister Theresa May, who contributed to the report, said there can be no good explanation for the massive under-representation of women at the top of British business.
"Every single male CEO who looks around his boardroom table to see nine out of 10 male faces staring back at him needs to ask himself what he is doing to make his business one which his daughter or granddaughter can get on in," she wrote.
Vanda Murray OBE led Blick PLC in the early 2000s. She currently chairs the board at Marshalls PLC, a FTSE 250 construction firm. While she welcomes recent moves to encourage women to make up 30% of company boards, she says it's in executive, decision-making roles where women are still underrepresented.
"There are talented females out there, no-one could really argue against this," she said.
Leadership groups with people from mixed backgrounds, ethnicity and gender do better because "they challenge more, and they have more discussion and debate and that leads to better decision-making," she said.
Original source: BBC