This is good news to female finance executives who aspire to become CFOs and female CFOs who might want to ask for better remuneration.
According to an S&P Global study titled When Women Lead, Firms Win, companies—when comparing performance under male predecessors—saw a 6% growth in profits and 8% better stock return within the first 24 months of appointing female executives for the CFO post.
Based on a research looking into 6000 companies on the Russell 3000 over the last 17 years, the report says that female CFOs of these organizations brought in US$1.8 trillion of additional cumulative profits.
However, men still outnumber women when it comes to the CFO role by about 6.5 to 1 as of end-2018, according to study.
Why female CFOs perform better
One possible reason why female CFOs perform better is that they are held to a higher standard by the companies’ board of directors than their male counterparts, said Daniel Sandberg, senior director of quantitative research at S&P Global and the author of the report.
From analysis of executive biographies, the average female executive has characteristics in common with the most successful male executives, suggesting that common attributes drive success among males and females alike, the report says.
Overall, the attributes that correlate with success among male executives were found more often in female executives, the report adds.
This finding is important because it refutes the commonly held belief in “token” female executives, according to the report.
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