Do companies with women leaders on their executive committees produce better financial results? It appears they do.
[gdlr_notification icon=”icon-flag” type=”color-background” background=”#009cbb” color=”#ffffff”]The IDB, with the support of Google, invites you to the launch of ConnectAmericas for Women. Connect via hangout and participate in the online discussion with Adriana Noreña, General Director of Google for Latin America on May 24th, 3pm EST. Register here. It’s free and fast.[/gdlr_notification]
Three years ago this month, McKinsey published a study of 345 companies, in six Latin American countries, examining their financial results and the gender composition of their executive committees.
The study showed a clear link between gender and profits in all business sectors and in all countries — Argentina, Brazil, Chile, Colombia, Mexico and Peru. Companies with one or more women on their executive committees outperformed those with all-male committees. Their Return on Equity (ROE) was 44 percent higher, and their Earnings Before Interest and Taxes margin (EBIT, the company’s profitability on sales) was 47 percent higher.
The research concluded that women’s presence gives the top team a better mix of the leadership skills and behaviors that might affect certain important aspects of an organization’s health, such as its values or its ability to innovate, which in turn have been shown to influence financial performance.
How do Latin American and Caribbean women lead?
The study also demonstrated that women tend to lead with certain behaviors. For example, women place more emphasis on people development and collaborative decision making, while men are more comfortable making decisions alone. Out of a total of nine leadership behaviors important to organizational health, women display five of the traits more often than men.
The Inter-American Development Bank Group agrees that equality is good for business and has been developing several tools to empower women entrepreneurs throughout the region. The IDB’s Integration and Trade Sector has partnered with public and private entities and numerous local initiatives, to support female entrepreneurship, offering resources and tools to boost growth in companies led by women.
One of our newest tools is ConnectAmericas for Women, a business services platform for businesswomen and women entrepreneurs set to launch in May that offers, at no cost, a unique business network, market opportunities, online courses, entrepreneurial support resources and inspiring success stories to strengthen and grow companies led by women in Latin America and the Caribbean.
It is part of ConnectAmericas.com, an online portal created in 2014 by the IDB to support small and medium size companies seeking to do business internationally. It already has more than 60,000 registered users.
Why ConnectAmericas for Women?
- Women represent 42% of the economically active population in Latin America and the Caribbean.
- But only 22% of the region’s small and medium enterprises (SMEs) are owned by women, mostly microenterprises.
- To grow their businesses, women require, among others:
- Increased access to markets and networks that can enhance their ventures.
- Access to specialized knowledge to improve their companies’ management.
- Access to information about financial and non-financial services.
ConnectAmericas.com has already surpassed expectations as the leading social networking site for businesses in the Americas. Created by the IDB’s Integration and Trade Sector in partnership with Google, DHL, Visa and Alibaba.com, the platform is free of change and offers its members the opportunity to:
- connect with over 60,000 businessmen and women from over 80 countries,
- participate in procurement opportunities from the IDB, public entities, and large corporations operating in in the region, such as Grupo Britt and McDonald’s,
- and access training tools and practical information to facilitate the realization of these business transactions.
A couple of months ago, author Rania Habiby Anderson presented her new book Undeterred: The Six Success Habits of Women in Emerging Economies at the IDB headquarters in Washington, DC. Addressing an audience of specialists and corporate leaders from across the region she said it makes good business sense to cultivate women in business – whether it is in top executive positions or as entrepreneurs. “For an economy to grow and a nation to develop, it needs to engage all the bright, talented people it has.”
Connect via Hangout and participate in the online discussion with Adriana Noreña, General Director of Google for Latin America on May 24th, 3pm EST. Register here. It’s free and fast. And subscribe to our new blog.