A new study finds that companies with female executives have greater profits than companies that do not. The Peterson Institute for International Economics published this groundbreaking research, which analyzed the profits of 21,980 publicly traded companies in 91 different countries and found a significant connection between female leaders and profitability.
This study also shows that an increase of women in corporate leadership positions positively correlates to an increase in girls’ math scores, absence of discrimination towards women, and availability of paternal leave. The positive correlation between female leadership positions and high math scores is attributed to the pipeline effect: Women in leadership roles inspire young girls to aim for similar positions.
More surprising is the paternity leave link. Researchers expected that countries with better maternity leave would have more women in leadership positions. But as it turned out, countries where men are given paternity leave have a greater number of women in leadership positions than those that focus on maternity leave alone. When men are also expected to take care of their children, women do not feel pressured to take time off from work, and experience less stress.
Though this report is the most recent and comprehensive study on the topic, the idea that female leadership is great for business has been found in plenty of previous research. A 2012 study surveyed 7,300 business leaders, and found that women were generally rated more competent than their male counterparts. Women felt they had to work much harder then men to be taken seriously, which lead to great leadership skills. Whether this is overwhelmingly true or not, the new 2016 study quantitatively shows that women are an integral component of the success of corporations. Women expand the skill set of companies, which in turn increases profits.