middle aged woman with glasses holding out hand to shake hands (Photo: Shutterstock)

Companies looking for better financial returns should consider a female CFO.

Within the first 24 months of appointing female CFOs, companies saw, on average, a 6 percent increase in profits and an 8 percent better stock return compared with performance under their male predecessors.

These women brought in $1.8 trillion of additional cumulative profits, according to a study by S&P Global Market Intelligence. The researchers looked at 6,000 companies on the Russell 3000 over the last 17 years.

One of the reasons female CFOs may be outperforming their male peers is because they're held to a higher standard, said Daniel Sandberg, senior director of quantitative research at S&P Global and the author of the report.

"The bar is a little bit higher for females," he said. "The result is that the male group that is a contender for an executive position is a little overfished and the female contingent is under-utilized." Men outnumber women in the CFO job by about 6.5 to 1, the study found.

Investors including BlackRock and S&P Global have demanded more gender parity on corporate boards. Women make up half of the workforce but only control about 5 percent of the CEO jobs at the biggest companies and a quarter of board seats.

Companies that hired a woman as CFO had about twice as many female directors. After hiring a female CEO, the board tended to increase in diversity the two years after that, too, Sandberg said.

READ MORE:

Copyright 2019 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

C-Suite
Retirement