Further Proof of How Women in Charge Profit Companies - Building Gender Balanced Business

• By now it should be received wisdom, but it never hurts to prove it again: Having more women in charge is good for a company’s bottom line.

• The latest proof comes from a Pepperdine University study.

• After years of tracking the performance of about 200 of the Fortune 500 companies (those that provide a gender breakdown of their executives), Roy D. Adler and his colleagues at the California school consistently found the “correlation between high-level female executives and business success has been consistent and revealing.” And the better a company was at promoting women, the better it tended to rank in terms of profitability.

• For 2008, the researchers switched to using publicly traded companies on Fortune’s “100 Most Desirable MBA Employers” list based on votes by women. But there was no change in the results — places where women are promoted and places where they want to work both outperform less women-friendly or popular ones.

• The details? At least half of the 56 companies on the list beat the Fortune 500 benchmark in terms of profit as a percentage of three variables. And no more than 36% of the companies lagged behind the index.

• The authors offer “one possible explanation for the women-profits correlation: Firms exhibit higher profitability when their top executives make smart decisions. One of the smart decisions those executives have consistently made at successful Fortune 500 firms is to include women in the executive suite — so that regardless of gender, the best brains are available to continue making smart, and profitable, decisions.”

The Miller-McCune report