

Companies with a female CEO has lower profit margins - draugadrotten
http://www.dn.se/debatt/foretag-med-kvinnor-som-vd-har-lagre-vinstmarginal/

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drallison
In English thanks to Google Translate:

Simplified debate . The discussion of gender equality in business should not
just be about board seats . Our analysis shows that companies with women CEOs
have lower profit margin than those with male CEOs . It can have several
causes. Regardless of the problem must be taken seriously , writes Enterprises
CEO Elisabeth Thand Ringqvist .

Simplified debate . The discussion of gender equality in business should not
just be about board seats . Our analysis shows that companies with women CEOs
have lower profit margin than those with male CEOs . It can have several
causes. Regardless of the problem must be taken seriously , writes Enterprises
CEO Elisabeth Thand Ringqvist .

The debate about gender equality in business easily degenerate into a debate
for or against affirmative action in exchange boards . It's a simple question
with opposites and it's easy to take a stand for or against . But we want to
achieve true equality when it comes to economic power in society must deepen
the debate and tackle the much harder questions than that.

Ahead of International Women's Day on 8 March, the entrepreneurs made ​​an
analysis of the percentage of female CEOs in the business and how
profitability looks in enterprises run by women and men. Our intention has
been to give strength to the argument that more women leaders lead to
increased profitability and that companies themselves thus should have a
strong economic incentive to tackle the issue .

But the result was the opposite. Our analysis of the profitability of more
than 125,000 companies divided into female and male CEOs gave an unambiguous
result . Companies with female CEO is 12-17 percent lower profit margins than
companies with male CEO . Concretely this means that companies led by women
have on average 7.0 percent profit margin while the company headed by men , on
average, 8.4 percent. The profit margin is a good comparative measure since it
measures the profit a company makes before interest expenses in relation to
sales. Thus does not affect leverage and firm size analysis, which is based on
the latest available financial statements (in most cases 2012 or 2013). We
also tried the obvious explanation that it could be due to its age, solidity,
what industry it operates in , the number of employees or where in Sweden it
seems . The result stands up and is stronger than if one does not account for
these variables.

For those of us who want an egalitarian enterprise , it is a serious
discovery. Differences in profitability not only affects the owner's personal
finance by return ( most businesses are owned and managed by the same person).
At the economic downturn, companies with lower margins more vulnerable , which
means that more companies are led by women were threatened with closure or
bankruptcy.

The profit margin also affect the potential for expansion. In seeking new
capital from outside investors or from the bank 's earning capacity one of
several important factors that investors are looking at. Generally lower
margins in women's business means that more capital will be channeled to
companies headed by men .

To present such a clear result is of course not without controversy . There
are certainly those who take it as an excuse not to address the issue of
gender equality. But it is not : we have only investigated the CEOs, not
management teams or boards . There is solid research showing that companies
with a true diversity, not only with men and women, but also in terms of
different levels of experience , age, origin , geography , and other products
are more profitable than homogeneous companies.

On the other hand, will surely discovery to be criticized by those who
consider that the publication impedes equality. To them I would say that I ,
as a feminist and a member of the government delegation for equality in the
workplace , is convinced that achieving gender equality and must, to be
credible and win in the long run , based on solid facts and not filtered
through political glasses.

The discovery puts his finger on a fundamental question : Why is it that
female CEOs on average have lower profit margins ? In answer to that question
are probably many important discoveries to make about how we work with gender
equality, not only in business , but in society at large.

I do not sit on the answers but want to highlight some possible explanations ,
all of which require further analysis and debate.

One obvious possibility is that women are inferior to men on charging for the
same product or service. My experience is , for example, that many women
starting and leading welfare business comes from operational activities where
care is more important than financial considerations. Many men in the industry
will, however from the outside with a firm financial perspective from day one.

A less obvious possibility is that it actually has to do with how men and
women are treated in business. It's something I've experienced , where I
sometimes considered " young woman " or mother , despite a long career in
politics and business , and with two children approaching adolescence. The
same is likely to occur in business transactions . With men on both sides of
the negotiating table , so bondar man and lands in a "good business deal ."
With a woman as a counterparty becomes different expectations and the search
for consensus smaller.

A third possibility is that the profit margin is lower because the female CEOs
, for example, invest more in their staff. We know nothing about from our
investigation , and if it is then it could of course be a real business
decision. But if the result is a lower long-term earning capacity can also be
any such benevolence be problematic.

Whatever the explanation , the problem must be taken seriously. It's not a
bold guess that a lower profit margin in the long term will have major
repercussions on the desire to start and run businesses . It is unfortunate
for equality itself. But the real tragedy is the many good business ideas ,
innovations and new jobs that will be lost .

I have long felt an aversion to the simplifications made ​​in the debate on
equality in the business world , which is often reduced to be about changing a
total of 270 board seats in Swedish listed companies. By raising the issue of
profit margins , I want to help deepen the discussion. Not least , I want
gender equality to act also on the more than 70,000 women who are CEOs, and in
many cases the owners of companies that are not publicly traded . Do we want
to achieve real equality in the business world , so we have to make the leap
from listed companies' boards to discuss how women's businesses to become as
profitable as that of men . Then we really start to reach the core issue of
how we equalize economic power .

Elisabeth Thand Ringqvist , CEO of Sweden's largest entrepreneurial
organization Entrepreneurs

