US think tank reveals female leadership as profitable

WASHINGTON: A global survey of companies from 91 countries suggests that the presence of women in corporate leadership boosts firm performance, generating more profits, according to a U.S. think tank.

The study of 21,980 firms, conducted by The Peterson Institute for International Economics, revealed that 30 percent female executives help companies gain 6 percent more profits.

This correlation reflects the payoffs of non-discrimination as well as a firm’s improved skill diversity with more female leadership, said the study report released Monday.

“If you’re a firm and you’re discriminating against potential female leaders, that means you’re essentially doing a bad job of picking the best leader for your firm,” said Tyler Moran, one of the study’s three co-authors.

The results “suggest that the payoffs of policies that facilitate women rising through the corporate rank more broadly could be significant,” said the study.

Firm characteristics such as corporate size, absence of discriminatory attitudes and availability of paternal leaves affect female presence in leadership.

“This research sheds light on the importance of establishing modern workplace benefits, providing equitable sponsorship opportunities, and creating inclusive work environments, so that both men and women can have equal access to leadership positions,” said Karyn Twaronite, a spokeswoman for services company Ernst Young, which helped fund the study.

However, the study also showed that while female executive ranks boost profitability, women chief executive officers or board members are not as influential on corporate performance.

Currently, about 30 percent of companies worldwide have no women either as executives or board members, the research has found.  

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