By Donna Harris
Recent studies prove what most female executives have long suspected. We are strong leaders, effective job creators and solid financial performers; and the numbers are beginning to show that we generate better results than our male counterparts across all stages of the corporate lifecycle.
As small business owners, we are significant contributors to the country’s economic engine. Women own 38% of all businesses in the U.S.—that’s nine million women-owned businesses that employ 27.5 million people and produce $3.6 trillion in revenue. Yes, TRILLION.
Women are also efficient and effective leaders of emerging companies. A 2007 study of venture capital-backed firms showed that companies led by female CEO’s delivered an average of 12% higher revenues using one-third less committed capital than those led by men.
At the upper end of the spectrum, studies of large corporations continually demonstrate that there is a strong correlation between shareholder return and a higher proportion of women executives. In fact, according to the non-profit organization, Catalyst, big companies with the greatest number of female board members, on average, have significantly better financial performance than those with fewer women. In return on equity, companies with the highest percentages of female board members outperformed those with the least by 53%. In return on sales, the companies with more female board directors outperformed by 42% and in return on invested capital, by 66%. That’s a stunning difference!
Yet, against this backdrop of solid financial performance, we still have a U.S. economy where over 14 million people are out of work (at a real cost of $120 billion paid out unemployment benefits last year!). With unemployment rates hovering just below 10%, the near-term future doesn’t look much brighter.
Solving such a complex economic recession is no easy task. But it’s hard to ignore the hard numbers that demonstrate the strong financial performance of women-owned and women-led firms. Companies need more women at the top.
Women have been in mainstream business for 30 years, but we are woefully under-represented no matter how you slice the numbers. Women still make up less than 16 percent of the corporate officers in America’s 500 largest companies. In fact, there are only 15 women CEOs in the Fortune 500. Women compose only 13.6% of board directors and hold only 7.9% of the highest titles in corporations. And women are only 5.2% of the top earners (not to mention the 20% less income we make as compared to our equivalent male counterparts).
The typical arguments for why companies need more female leaders tend to revolve around soft-sell arguments – accessing a bigger talent pool, investing in diversity, reflecting the customer base, bringing diverse viewpoints and skill sets. For many public companies, “doing the right thing” has driven initial forays into recruiting more female leadership talent.
All of these viewpoints are correct – women do tend to bring a different set of skills and a unique perspective to the table. But the numbers themselves prove out, and we should be confident enough to let them speak for themselves. Setting aside the traditional arguments for “gender equity,” it just makes sound financial sense to put more women at the top.
Donna Harris is Vice Chair and Chief Marketing Officer of the Interpoint Group, a Washington, DC based business management firm that offers an integrated suite of government market sales, federal/state/local government relations and public affairs. She is also a member of Interpoint Group’s Board of Directors, a Partner in the firm and a member of the senior management committee. See www.interpointgroup.com
