Women = Profits

With women's influence growing by the day, is it any surprise to find that more women are needed to do business with female customers?

St George Bank’s new CEO, Gail Kelly, is living proof that ‘women = profits’ after her recently announced appointment resulted in $97 million being added to the value of Australia’s 19th largest public company.

Formerly head of customer service at the Commonwealth Bank of Austrlaia, the South African-born Ms Kelly is a surprise addition to the ranks of Australia’s ‘Top 100’ CEOs – and its only female representative after Cochlear Ltd’s chief, Catherine Livingstone, resigned about 12 months ago.  The new initiate to the premier boys’ club, Ms Kelly is renowned for her intense focus, superior time management and organizational skills – talents she purportedly honed juggling work and family (including four children) over the past 15 years.

In her new capacity, the banking chief will oversee 8,000 staff and 400 branches and will, no doubt, continue to thrive on the four hours she reportedly sleeps a night. If Ms Kelly sounds like Superwoman, you may be right. So far, her appointment has added 20 cents to St George’s share price … translating into millions of dollars for the already $8.5 billion asset–rich company.

Mixed-gender boards perform better

Not surprisingly, business leaders both here and overseas are becoming aware of the growing body of research regarding women and business success. A recent US study[1], for example, examined the positive performance impact of women’s presence on the boards of companies making initial public offerings (IPOs).

The study found that “having women on the top management team results in higher earnings and greater shareholder wealth,” and that it was the gender mix on boards that resulted in better long-term performance. Similarly, an influential American Management Association (AMA, 1998) study compared all-male senior management teams to mixed-gender senior management teams and found women made a significant positive difference to the financial results of the company, including improved gross sales revenues, improved market share (38% versus 61%) and overall improved net operating profits.

Another international study has found that, increasingly, female-style leadership is more coveted in the modern world of business[2]. The study notes that characteristics typically considered ‘masculine’ rather than ‘feminine’ have historically been considered as traits necessary for management.  Women, as a result, have tried to act like men.

However, times are changing, with management styles evolving towards valuing a mix of so-called ‘masculine’ and ‘feminine’ characteristics. A study of women managers in the UK, for example, reports that the characteristics most highly valued by organizations in that country were being ‘competitive, co-operative and decisive’ as opposed to ‘emotional, manipulative or forceful’. This suggests that more female attributes are being recognized and valued.

Female executives help deliver greater company earnings

Furthermore, companies slow to move women into top executive positions may pay a high price, according to the US-based Glass Ceiling Research Center. The Center tracked the number of women in high-ranking positions in 215 ‘Fortune 500’ companies between 1980 and 1998, and found a strong correlation between a company’s profits and the number of senior female executives in its ranks. Companies with the highest percentage of female executives delivered earnings far in excess of the median for other large firms in their industries[3].

A 1997 analysis of 2,562 mutual funds found that funds managed by women perform somewhat better than those run by men. Within the US Equity fund group, women beat men in seven of nine categories[4].

With Australian women currently comprising 50% of Australia’s intellectual wealth and growing in influence as workers, investors and consumers at a greater rate than men, is it any surprise to discover that a woman like Gail Kelly is a business asset?

References:
[1]  See T.M. Welbourne: Wall Street likes its women: An examination of women in the top management teams of initial public offerings, Working paper 99-07, Cantre for Advanced Human Resource Studies (CAHRS). http://www.ilr.cornell.edu/depts/cahrs/PDFs/WorkingPapers/WP99-07.pdf., p. 3, quoted in International Labour Office Geneva, Breaking Through the Glass Ceiling – Summary, page 11, 2001
[2] Linda Wirth, Breaking through the glass ceiling – women in management, International Labour Office, Geneva, 2001, p100-101. 
[3] Study by Roy Adler, Pepperdine University, California, USA, reported in the Harvard Business Review, November 2001.
[4] Unattributed article, “If you don’t believe this, read it again: Women fund managers outdo men”, Money, November 1997.