Study: companies managed by women more profitable than those run by men
Analysis focuses on return on capital
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Companies managed by women are on average ten per cent more profitable than those with a man as CEO.
A study organised by the Finnish Business and Policy Forum EVA finds a clear correlation between women in management and profitability, which cannot be explained by differentiation of companies or fields of business. A similar effect appears to exist with women on boards of directors.
The study, conducted by researcher Annu Kotiranta, Professor Anne Kovalainen, and head of research Petri Rouvinen, is the first investigation into the profitability of companies in Finland run by women. The measure that was used is the return on invested capital.
The researchers say that it is likely that women who attain leading corporate positions have had to overcome more hurdles, and are therefore more competent than average.
"They either have more drive, or a desire to show", Kovalainen says.
Teija Andersen, CEO of Fazer Amica, was excited at the finding. "It sounds awfully great."
She adds that everyday experience has reinforced the impression of competence among women executives. For instance, she says that it is rare that women would show up for a job interview with a salary request that would be disproportionately high with respect to their knowledge and professional skill.
Andersen feels it is only a matter of time for big changes to set in. "Women will inevitably reach management positions. It has been slowed down too long, and for bad reasons."
In addition to the appropriate education, Andersen feels that being a good manager requires growth and learning. A university degree alone is not enough.
Andersen feels that until now there have been very few potential women managers. "Now we are getting to have women over 40 who have the necessary management experience, and who are capable of accepting challenges."
Andersen has long been in the Fazer Group. She has been a product manager, head of marketing, product development head, sales manager, the managing director of a smaller unit in the company, and now, CEO of Fazer Amica. "Something is left in my tool box from every job", she says.
Professional board member Soili Suonoja, a former Amica CEO, agrees that women managers are a very select group.
"No matter what anyone says, it is still hard work for a woman reach the managerial level", she says. This is especially the case in large companies.
She also takes a swipe at EVA, which commissioned the study. In her view, the organisation is a real men's choir.
Suonoja says that she is upset whenever people who have not made efforts to increase participation by women in their own companies trumpet the cause of gender equality.
The proportion of women on corporate boards of directors is not a measure of equality in her view, because day-to-day corporate decision-making takes place on management teams. "Equality will begin when half of the members of management teams of large Finnish companies are women."
Suonoja is on seven corporate boards, including Alko, Itella, Lännen Tehtaat, and Lassila & Tikanoja.
The researchers behind the study say that the results give credence to the idea that taking women better into account can offer companies a clear competitive edge.
However, they say that it would be wrong to claim that replacing the present male managers with women would automatically improve profitability.
The study was conducted on Finnish limited liability companies, which employed at least ten people in 2003. Such companies number 14,020.
Helsingin Sanomat
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| 25.9.2007 - TODAY |
 Study: companies managed by women more profitable than those run by men |
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