Why having woman at top is good for business

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Female CFOs bring in US$1.8 tril more than male peers over last 17 years. FMTNews

NEW YORK: Companies looking for better financial returns should consider a female chief financial officer.

Within the first 24 months of appointing female CFOs, companies saw, on average, a 6% increase in profits and an 8% better stock return, compared to performance under male predecessors. These women brought in US$1.8 trillion of additional cumulative profits, according to a study by S&P Global Market Intelligence. The researchers looked at 6,000 companies on the Russell 3000 over the last 17-years.

One of the reasons female CFOs may be outperforming their male peers is because they’re held to a higher standard, said Daniel Sandberg, senior director of quantitative research at S&P Global, and the author of the report.“The result is that the male group that is a contender for an executive position is a little over-fished, and the female contingent is under-utilized.” Men outnumber women in the CFO job by about 6.5 to 1, the study found.

Investors including BlackRock and S&P Global have demanded more gender parity on corporate boards. Women make up half of the workforce but only control about 5% of the CEO jobs at the biggest companies, and a quarter of board seats.After hiring a female CEO, the board tended to increase in diversity the two years after that, too, Sandberg said.

 

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