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London Companies With More Female Executives ‘Make More Money’

by : Emma Rosemurgey on : 28 Jul 2020 12:34
20th Century Fox/NBCUniversal Television Distribution

New research has revealed that companies with more women in executive positions are actually more profitable.

Yep, we all know the gender pay gap exists, and sadly there are startlingly few women in higher positions compared to their male counterparts, but this could be where many businesses are going wrong.

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Research that looked at London-listed companies found firms where at least one-third of the bosses are female had a profit margin more than 10 times bigger than those without female leaders.

Companies With More Female Executives 'Make More Money'Pexels

I mean, the stats speak for themselves.

According to gender diversity and inclusion specialists The Pipeline, just 14 companies out of the largest 350 listed have female leaders, while 15% of them have no female executives at all.

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Co-founder Lorna Fitzsimons believes having more women involved in the decision-making room allows businesses to have a better understanding of its customers, which in turn allows them to turn over more profit.

Companies With More Female Executives 'Make More Money'Pexels

The Pipeline has put together the Women Count 2020 report, which Fitzsimons says ‘shows the stark difference in net profit margins of companies that have diverse gender leaderships compared to those who do not’, as per the BBC.

The difference between companies with female executives and those without is clear as day. Those with no women on the executive committee have just 1.5% net profit, while those with more than one in three women at that level have profit margins of around 15.2%, according to the research.

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Around just 2 in 10 women are chief financial officers in the London-based firms, while men make up 96% of investment managers.

Companies With More Female Executives 'Make More Money'Pexels

Out of all the business sectors, construction and retail scored lowest when it came to female executives, despite the majority of retail workers being female.

Fitzsimons added:

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If you look at retail, entry level jobs are usually 80% women. But they don’t make it to the executive level.

Former Prime Minister Theresa May contributed to the report, saying there’s no decent explanation as to why women are so under-represented at the top of British business.

Companies With More Female Executives 'Make More Money'PA Images

‘Every single male CEO who looks around his boardroom table to see nine out of 10 male faces staring back at him needs to ask himself what he is doing to make his business one which his daughter or granddaughter can get on in,’ she wrote in the report.

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The profit margins speak for themselves: it’s time to get more women to the top of British business.

If you have a story you want to tell, send it to UNILAD via [email protected]

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Emma Rosemurgey

Emma Rosemurgey is an NCTJ trained Journalist who started her career by producing The Royal Rosemurgey newspaper in 2004, which kept her family up to date with the goings on of her sleepy north east village. She graduated from the University of Central Lancashire in Preston and started her career in regional newspapers before joining Tyla (formerly Pretty 52) in 2017, and progressing onto UNILAD in 2019.

Topics: Life, Business, Now

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BBC
  1. BBC

    Firms with more female executives 'perform better'