It might be the most fool-proof argument for ending the disparity between men and women in the boardroom: A new study finds that women just might run a company better.
From the McMaster press release:
Arguments for gender equality, quotas and legislation have done little to increase female representation in the boardroom, despite evidence showing that their presence has been linked to better organizational performance, higher rates of return, more effective risk management and even lower rates of bankruptcy. Bart’s and McQueen’s finding that women’s higher quality decision-making ability makes them more effective than their male counterparts gives boards a method to deal with the multifaceted social issues and concerns currently confronting corporations.
Numerous studies over the years have provided evidence that women deserve to be board directors. One 2007 study found that boards with significant representation of women have a 66% higher return on invested capital, 53% higher return on equity, and a 42% higher return on sales compared to boards with more men. Another 2009 study discovered that having a female board director slashes a company’s bankruptcy risk by 20%. Other studies have shown that women can yield superior results in other areas of business as well. We recently reported on a study from financial services firm Rothstein Kass showing that female hedge fund managers outperform their male counterpartsby a lot. And yet, women make up just 9% of corporate board membership globally. In the alternative investment space, women say that there is little motivation to stay in the sector, and in any case, there aren’t enough available positions in what they call an old boys’ club. Something needs to change.
Do you think women make better decisions than men? Let us know in the comment section below.