Though women are still vastly underrepresented in senior positions, the number is slowly growing. A report by McKinsey found that the number of women in the C-suite has risen from 17% to 28% since 2015. And, whilst there is a long way to go before true equity for women in business is possible, particularly for women of colour, the progress that is being made should not be overlooked or undervalued.

But it should be sped up.

We probably don’t need to tell you, but increasing the number of women in your business can be a real positive – both in terms of levelling the playing field for staff and providing better results for the company overall. But don’t just take it from us, below are seven studies from leading academic minds and institutions around the world that prove why women are a key asset to any organisation.

1) Female CEOs are less likely to put the company in debt than males

A study from Durham University Business School found that female CEOs are more debt averse than male CEOs. Whilst debt can, in some ways, be a useful tool for companies, in an increasingly fast-paced, competitive and VUCA world having shaky finances is becoming increasingly dangerous. Debt can creep up on a business faster than one may think, and can be difficult to bounce back from.

Dr Yeqin Zeng, Professor of Economics at Durham, analysed data from S&P 1500 companies during the period 1993-2021 – a period her study marks as “dynamic years” for encompassing the bursting of the dotcom bubble (2000-2002), the global financial crisis (2007-2008), and the COVID-19 pandemic (2020-2021), looking at their finances, decision making and leadership.

Her findings make the argument that female CEOs are often more risk-averse than their male counterparts and are less likely to get the company into financial difficulty. Why? Female CEOs made safer, surer choices and ensured their company got the most bang for its buck. This, helped to keep debt burdens low. Male CEOs on the other hand took bolder, riskier actions, tempted by the promise of higher rewards.

“Over the past 20 years we’ve seen an increase from just 0.5% of CEOs in the S&P 1500 being women, to 7% in 2021,” says Dr Zeng. “Clearly it is a positive that the gender split of CEOs is on the up, but it makes for interesting new challenges for firms when they look at how their company is structured and performs.”

If companies, finding themselves overexposed to debt repayments, switched to female CEOs, they may not be looking at failure and bankruptcy, and instead at a healthy amount of debt, and a healthy company. In a time where the costs of debt are skyrocketing, this research could help any company that is either looking to reduce the amount they’re in the red, or currently on the hunt for a CEO… or maybe both!

2) Female CEOS are less likely to ignore poor performance

Following on from the risks that come with debt, the cons of overconfidence in a CEO are not to be overlooked. Research from Vienna University of Economics and Business (WU Vienna) found that overconfident CEOs maintain a dangerously optimistic outlook on their company’s financial performance and take less notice of negative feedback. As a result, any efforts to correct damaging courses of action only came when it was already too late to recover.

Furthermore the study, undertaken by Christian Schumacher and his colleagues and also examining all firms included in the S&P 1500 Index, discovered that overconfidence was an overwhelmingly male phenomenon.

In contrast, female CEOs were less likely to show such overconfidence in their abilities. The study found women to be more open to receiving different types of feedback regarding business strategy allowing them to correct course earlier and avoid ruin.

The study highlights the role that personalities play in a CEO’s financial performance evaluation process, and makes a strong case for the argument that one’s rational decision making can be affected by their sense of their own ability.

3) Having more women on boards leads to better company performance

Companies with more female board members, achieve a much stronger level of overall performance, according to research from NEOMA Business School.

Professors Tao, Belaounia and Zhao found that female directors in countries with better gender equality possess greater skills and hold a more powerful influence due to better access to education and better professional opportunities. They are also afforded more amicable boardroom dynamics. Female directors’ presence, they found, significantly improved board efficiency.

Unfortunately, in countries with lower gender equality, this is not always the case. Female directors in such regions were found to have little impact on firm performance.

Alongside performance, having more women on the board was found to be effective in other areas too. For example, like in Christian Schumacher’s study, the NEOMA study found that less excessive risk taking was also common amongst female leaders.

The lesson here? Setting quotas and targets for greater female representation at senior levels is important, but it is just as important that such measures are accompanied by providing women with an equal access to education and socio-economic opportunities. 

4) Having more women on the board makes companies more ethical

Having more women on the board of a company reduces the number of “related party transactions” (RPTs) otherwise known as “back door deals”.

The study, undertaken by Professors Haithem Nagati of emlyon business school, Mehdi Nekhili of Le Mans Université, and Moez Bennouri of Montpellier Business School, investigated the relationship between gender diversity and RPTs.

RPTs are viewed worldwide as a major policy issue and as unethical because they are seen as a conflict of interest – and an issue for minority shareholders.

After analysing a sample of French firms, the researchers discovered a significant negative correlation between the proportion of female directors and the number of RPTs. Females were found to be more likely to challenge managers’ use of RPTs, which decreased their number.

The researchers add that a female’s demographic, social, and psychological differences from male peers provide them with additional abilities and incentives to carry out strict monitoring, making them act in more ethical ways. This can take shape in many different ways, like in the next point!

5) More women in upper management increases sustainability

Research from Vienna University of Economics (WU) has found that having more women in top positions has a positive effect on achieving sustainability goals.

Professors Valentin Kiefner and Alexander Mohr from WU found a positive link between a high number of women in upper management and a company’s willingness to have more sustainable practices.

They added that multinationals with a high international diversification are even more likely to be able to enhance their support of the SDGs through an increase in the share of female executives.

Interestingly, the researchers found that the reason for this is because not only are women more interested in sustainability goals, but also because they are subject to higher expectations from external stakeholders due to stereotypical perceptions of women in management.

6) Women build better networks outside of the organisation than men

Women build stronger networks by using mutual connections. But men tend to rely on face-to-face connections to build their networks, according to research from ESMT Berlin.

This study, undertaken by Gianluca Carnabuci, professor of organisational behaviour at ESMT, alongside Carla Rua-Gomez from Skema Business School and Martin C. Goossen from Old Dominion University  observed data collected over the course of 25 years on how professionals within R&D teams formed collaborative ties with higher status colleagues.

The findings showed that women excelled when creating connections through indirect means – typically reaching out via a third party. Meanwhile, men’s networking success was linked more closely to proximity and the opportunity for face-to-face interactions.

The reason, the researchers say, comes down to gender stereotypes. Indirect connections can help highlight women’s distinctive strengths and counteract gendered assumptions on ability, whereas proximity allowed for colleagues to judge competence on stereotypically masculine traits such as assertiveness and self-confidence.

However for men and women, the best success came when they were able to use both methods.

The lesson to take from this? Inclusive environments in the workplace are key to providing the best opportunity for employees to network and thrive when building connections outside of the business.

7) Women are more likely to collaborate internationally than men

And this might help explain why women are more likely to collaborate with international counterparts too. Professor of Experimental Economics, Jason Shachat, from Durham University Business School and his colleagues conducted this research by using the Prisoner’s Dilemma scenario to test opinions on international collaboration among American and Chinese students.

The results revealed female students to be more open to international collaboration than men were regardless of their nationality. Not only were they more likely to reach out and work together, they also did so at a higher calibre than male students.

The results suggest that companies should look to hire women for their international collaboration roles. Efforts to be more inclusive of women by appointing them to such roles could lead to greater success – not just for business but for solving global problems too.

Need we say more? The seven reasons listed above show that women bring a unique set of skills to the roles they inhabit, and a different perspective that could help propel your business into even further success. It’s clear that including more women in your business, and taking a more inclusive approach generally can yield incredible results.

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