Women executives boost bottom line: Survey
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Feb 09, 2016  |  Vote 0    0

Women executives boost bottom line: Survey

Companies that promote women perform better financially, a global study of nearly 22,000 firms concludes


Companies that want to boost their bottom line should promote more women to the executive suite, a global survey concludes.

Profitable firms that went from having no female leaders to 30 per cent representation saw a 15 per cent increase in their financial performance, the study by the Peterson Institute for International Economics found.

The reason for the success was elusive, the study said, noting it may be that women increase the diversity of skills available to a firm or that companies who discriminate against women underperform.

Having more women on the executive team had a greater impact on corporate success than having more women on the board, while having a women CEO made no difference, the study found.

Despite this apparent advantage, female representation at the highest corporate levels remains low, according to the review of nearly 22,000 firms in 91 countries, including Canada.

Almost 60 per cent of companies have no female board members, just over half have no women senior executives, and less than 5 per cent have a women CEO, according to the study, called Is Gender Diversity Profitable.

The findings of the Washington-based non-profit research organization come as little surprise to advocacy groups like Catalyst.

“I think it reinforces something we’ve been saying for over a decade. That there’s a business case for women in leadership,” said Jan Combopiano, senior vice-president research for New York-based Catalyst.

Indeed, it’s time the conversation moved beyond proving women’s worth, she said, to simply expecting women to be in leadership roles.

“We don’t do business cases for men in leadership,” she said. “There’s thousands of male board directors. I’m pretty sure some of them are not very good. But we’re not doing a study about them.”

Canada ranked in the bottom 10 countries reviewed by the institute, which may reflect the fact so many of its publicly traded companies are small firms working in the resource industries, said Michelle de Cordova, director of corporate engagement with NEI Investments, Canada’s oldest and largest ethical mutual fund.

The Peterson study found that, across the globe, larger firms and firms in finance and health scored the highest on female representation.

In Canada, the big banks have among the strongest track record of promoting women, Catalyst Canada research has found.

Royal Bank of Canada made history in 2013 when it named Kathleen (“Katie”) Taylor the country’s first female bank chair. Taylor has used her position to champion corporate diversity.

In a statement, RBC’s Chief Human Resources Officer Zabeen Hirji said: “We believe to win in your market, you need to hire the market. Diverse and inclusive teams make stronger teams, and strong teams make better business decisions which contribute to strong financial performance.”

More recently, companies in traditionally male-dominated sectors, like transcontinental railway company CN and gold miner Goldcorp Inc., have made significant strides in promoting women, De Cordova said.

Corporate Canada still has a long way to go, the Peterson study found, noting that women made up just 7 per cent of board members, 14 per cent of executives, 3 per cent of CEOs and 2 per cent of board chairs at the 2,074 companies surveyed.

The study is the first to compare gender diversity across dozens of countries.

It found countries that scored well on corporate diversity shared some common characteristics, including the availability of paternal leave, girls’ performance on math tests, and the relative absence of discriminatory attitudes toward female executives.

The countries that scored highest on corporate diversity, including Norway, Iceland and France, have implemented quotas for women on corporate boards, the study noted. However, there’s no evidence quotas have had either a positive or negative impact on corporate performance, the report also said.

Quotas have been highly controversial in Canada and the U.S.

In lieu of setting targets for companies, the Ontario Securities Commission last year adopted a U.S.-style “comply or explain” policy, which requires publicly traded companies to provide written plans for promoting women or explain why they have not done so.

So far, only 14 per cent of Canadian companies have a formal plan for promoting women to their boards - and only 7 per cent set specific targets, a review in September 2015 found. The banks had not yet reported.

The Peterson Institute study, which was conducted with the support of the audit firm EY, formally Ernst & Young, was based on 2014 data.

The institute is chaired by Peter G. Peterson, who co-founded investment bank The Blackstone Group and was secretary of commerce to former U.S. president Richard Nixon in the early 1970s.

Where women business leaders thrive

The most gender-balanced countries (of companies surveyed)


Percentage of female board members: 40

Percentage of female board chairs: 9

Percentage of female executives: 20

Percentage of female CEOs: 3


Percentage of female board members: 25

Percentage of female board chairs: 9

Percentage of female executives: 36

Percentage of female CEOs: 5


Percentage of female board members: 24

Percentage of female board chairs: 10

Percentage of female executives: 16

Percentage of female CEOs: 10


(ranked 7th last)

Percentage of female board members: 7

Percentage of female board chairs: 2

Percentage of female executives: 14

Percentage of female CEOs: 3

Least gender-balanced countries


Percentage of female board members: 4

Percentage of female board chairs: 2

Percentage of female executives: 13

Percentage of female CEOs: 2


Percentage of female board members: 4

Percentage of female board chairs: 2

Percentage of female executives: 11

Percentage of female CEOs: 0


Percentage of female board members: 2

Percentage of female board chairs: 1

Percentage of female executives: 2

Percentage of female CEOs: 1

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