Want Higher Profits? Put a Woman in the Top Job

Companies with female CEOs and CFOs produce superior stock price performance and organizations with a high gender diversity on their boards are more profitable than those without it, according to a study by S&P Global. Korn Ferry’s Shannon Hassler and Beatrice Grech-Cumbo lend their views on the topic.

October 21, 2019 – Diversity at the top, it seems, can pay. The matter of making leadership more diverse, however, remains an issue. Firms with female CEOs and CFOs produce superior stock price performance, compared to the market average, and firms with a high gender diversity on their board of directors are more profitable and saw larger stock returns than firms with low gender diversity, according to a newly released study from S&P Global Market Intelligence.

“As we look at financial performance, this research is yet another confirmation that women provide significant and positive value through C-suite and board leadership positions,” said Doug Peterson, president and CEO of S&P Global. “Diversity and inclusion across the C-suite and throughout companies benefits everyone — all employees, companies and economies.”

Bridging the Diversity Gap on Boards


A stubborn paradox exists within boardrooms across America. Companies are appointing more women to board seats than ever before, yet the overall share of women directors is barely budging. While business leaders have gotten the clear message that diversity matters in the workplace, it is equally clear that current methods of sourcing and selecting candidates is falling short.

Peggy Alford, a senior executive with PayPal who was just elected as the first African American woman to join the nine-member board of social media giant Facebook, joins Hunt Scanlon Media in New York on Nov. 6 to examine the disconnect between the business community’s intent to achieve greater equality on their boards and the realization of attaining that goal. She will explore why every company needs to cultivate a culture of inclusiveness and she will outline steps for companies and recruiters to take to boost diversification at a faster rate.

Join Peggy at Next-Gen Leaders: Advancing Women to the C-Suite! Women business leaders are looking for fresh pathways to the top . . . to help them get there we will draw on her expertise as well as top HR, talent, recruitment, and C-suite leaders from other blue-chip brands, including IBM, The New York Times, Littlejohn, LinkedIn, Avaya, WarnerMedia Entertainment, Pfizer, PepsiCo, The Philadelphia Flyers, PayPal, Facebook and a host of others. 

Sponsor or sign up to attend today!


Firms with female CEOs saw a 20 percent increase in stock price momentum, a measure of positive price trend, compared to their male counterparts in the executives’ first 24 months in office, said the study. Female CFOs had an even more significant impact. Companies that appointed a woman to the top finance role saw a six percent increase in profitability and eight percent larger stock returns during the first 24 months in office. Over the 17-year period for the study, firms with female CFOs generated $1.8 trillion more in gross profit than their sector average.

Improving Performance

“The evidence is getting louder,” said Beatrice Grech-Cumbo, head of Korn Ferry’s Advancing Women Worldwide initiative. The study, she said, builds on prior research indicating that organizations with more inclusive teams, such as women in leadership positions, get better performance from individuals, teams and entire organizations. “Those diverse groups are more likely to produce innovative products and deliver them faster to the market than non-diverse groups,” Ms. Grech-Cumbo said. “We really believe that organizations making this change see it as a source of value creation. They don’t just see it as the right thing to do.”

S&P looked at the firms listed in the broad-based Russell 3000 stock index. It analyzed the performance after 5,825 new executive appointments, of which 578 were female, since 2002. S&P found nothing in particular that the female leaders were doing differently from their male counterparts, but speculated that the women who were being appointed to top jobs were the “tip of the spear,” executives whose abilities and traits were far above those of average leaders.

That echoes the conclusions from a recent Korn Ferry analysis of 58 women who have led large U.S. corporations. “The women were in the top one percent in 17 of 20 key leadership traits,” said Shannon Hassler, a principal in Advancing Women Worldwide.


Tackling Gender Imbalance between Boards and Executive Teams
Progress for women leaders remains “excruciatingly slow,” a new study shows.  Armstrong Craven deputy CEO Rachel Davis joins us for a further look. She then expands on the topic on November 6 at the Hunt Scanlon Media Next-Gen Advancing Women Leadership summit in New York.


But while many organizations have committed to diversifying their leadership bases, Korn Ferry found that as a group they haven’t gotten very far. As of the end of 2018, there were 19 male CEOs for every female CEO and more than six male CFOs for every female CFO. It’s a stark contrast to broader employment demographics, where about half the workforce of large U.S.-based corporations are women.

A common complaint in corporate America has been that companies have difficulty finding women with the right experience to fill open leadership and board director positions. “All organizations can remove barriers to get more women into the leadership pipeline,” said Ms. Grech-Cumbo. “For instance, giving high-potential talent P&L responsibilities, roles not often given to women or non-white men, is an effective way to broaden skills and prepare them to succeed in even larger roles.”

“Organizations must recognize that just having diverse voices within leadership brings about clear business benefits,” she said.

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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