Here's what happens to profits when you put more women in senior roles

Last month we reported on the Dutch website that named and shamed the companies that had no women in senior roles, and looked at various published works that demonstrate the financial benefits of having women in higher positions.

Research conducted by the International Monetary Fund (IMF) has now further confirmed that evidence; analysing data from 2 million firms in 34 countries in Europe.

The "Unlocking Female Employment Potential in Europe" report concludes that having women in senior roles helps increase profit margins.

Christine Legarde, managing director of the IMF posted a blog on International Women’s Day (Tuesday):

The research finds that more women in senior managerial positions and in corporate boards, the more profitable firms are. One more woman in senior management or on a corporate board is associated with 8-13 basis points higher on return assets. High corporate profitability could support investment and productivity - another channel through which more women in the workforce can help mitigate Europe’s potential growth slowdown.

The potential for economic gains can have an positive impact on the European financial market:

If women choose to participate in the labor (sic) market as much as men do, Europe’s workforce could increase by 6 per cent. If they also choose to work as many hours as men, the workforce could grow by as much as 15 per cent.

The report lists three key factors that drives the research:

1. Europe’s ageing population and the decline of productivity growth

2. Gender gaps in senior positions remain prevalent

3. Gender equality in the labour market can bring macroeconomic benefits

Businesses take note...

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