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The Business Case for Gender Parity

Is it possible that companies with a higher percentage of women in leadership positions have higher profit margins as well? Maybe so, if data from a massive global study conducted in 2014 by the Peterson Institute for International Economics and consulting firm EY are to be believed. So reports

The research looked at results from about 22,000 global, publicly traded companies in 91 countries across various industries and sectors. The upshot: the corporations that had women in at least 30% of their leadership positions, or in the “C-suite,” had 6% higher net profit margins than firms with a lower percentage of top female managers.

The study examined female CEOs, board members and members of the C-suite. While women chief executives or board members don’t typically outperform their male counterparts, having more female top executives does statistically translate into higher profit margins.

At the same time, companies with more female board members tend to have more women in leadership positions (the so-called “pipeline effect”). The study had no shortage of telling results. Higher percentages of female leaders were found in larger companies, in countries that tend to discriminate less (not surprisingly), and where women score highly on math assessments compared with their male counterparts.

Perhaps most interesting: countries that have mandated paternity (not maternity) leave also boasted greater numbers of female executives. According to the study, the rationale is that, by sharing the responsibilities of child-rearing, women are able to devote more of their energies to developing their business acumen and professional contacts, which help them advance their careers.

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