Studies Show Businesses with More Females in Management Do Better. Here’s Why.

Not to play the gender card, statistics actually show that companies with females on their board of directors do better than those with no women. A study of Fortune 500 companies demonstrated that those with the highest number of women in management, recorded higher financial performance on the average. The study was based on three financial measures: return on equity, return on sales and return on invested capital.

Female managers

There have been a number of other studies that show a link between a balanced gender distribution in a company’s management and its profitability. These studies have been carried out in different countries, at different times, and across a variety of sectors. The result has been the same- companies with more female managers do better even in times of economic volatility. You only have to take a look at some of the companies with top female CEOs to understand this assertion.

A study in the US found that employee attitudes towards the gender of their bosses have been gradually changing. While a good majority preferred male bosses to female bosses about 62 years ago, the recent trend shows a change. Employees increasingly prefer female bosses, and understandably so.

So maybe the changing attitudes has to do with the fact that female managers tend to be better than their male counterparts. What has gender got to do with higher success rates in management positions?

Female Managers Engage Their Employees Better Than Their Male Counterparts

A likely reason for companies with more females in management positions recording higher success rates is that female managers engage their employees more than male managers. This research gives credence to this.

Female Managers Cultivate Employee Potentials Better

The management style of women seems to depend more on encouraging employee development and maximizing employee potentials than their male colleagues. According to a market research firm, women, as opposed to men, are more likely to delegate stimulating and challenging tasks that encourage development within their current roles and beyond.

With Female Employees, there are Higher Rates of Constructive Feedback

Of the things that workers appreciate most from their bosses, one of them is regular feedback. It is the case that female managers are more disposed to helping their employees achieve their development goals by providing regular feedback.

This contributes to making employees feel more valued, therefore helping them harness the power of positive reinforcement and encouraging them to do more.

In spite of the increased profitability that companies stand to experience if they had more female managers, there is still a lag. It is not just simply about having women in top managerial ranks, but also ensuring increased skill diversity which enhances performance, and less gender discrimination, which helps to promote and retain talent.

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