Anyone who doubts the presence of a glass ceiling only needs to look at the numbers: Only 6% of S&P 500 companies have women CEOs. That's despite a growing body of research that shows that companies with women leaders tend to perform better.
Should you aim to invest in those rare firms that have women calling the shots?
- A growing body of research shows that companies with women leaders tend to perform better.
- Eighty firms from the Fortune 1000 with women CEOs bested the S&P 500 by 226%.
- If you're looking to make money on the business prowess of women in high places, there are many funds and stocks to look at.
Women in Leadership Roles Add to Profitability
There's too much research to ignore. Having more women in C-suite leadership roles leads to increased profitability.
The Peterson Institute for International Economics (PIIE) reviewed 21,980 global publicly traded companies. These companies spanned 91 countries and were from a mix of industries and sectors. The results confirmed that having at least 30% of C-Suite positions as women add around 6% to a firm's net profit margin.
Between 2002 and 2014, 80 firms from the Fortune 1000 with women CEOs bested the S&P 500 performance by 226%, according to a Quantopian study. The top performers were Mindy Grossman at HSNi, the Home Shopping Network parent, and Debra Cafaro at Ventas, a healthcare and senior living REIT. During that period, both women leaders increased initial investment in their companies by more than 500%.
McKinsey has studied this topic for a while and produced a large amount of research. According to a report titled "Women as a Valuable Asset":
"Companies where governing positions are held both by men and by women have higher operating margin and market capitalization in the respective industry."
Why Women Make an Impact on Profitability
Women and men have distinct leadership styles. They also tend to focus on different aspects of a corporate structure. Their different backgrounds and experiences create a greater knowledge base than one coming solely from men. When companies combine diverse groups in leadership roles, they can achieve greater business results.
Laura D'Andrea Tyson, an economics and business professor at the Haas Business School (UC Berkley), noted at the 2016 World Economic Forum that women benefit businesses in many ways, from making complex decisions to improving innovation.
Investing Ideas From Women-Led Companies
If you're looking to make money on the business prowess of women in high places, here are some funds and stocks to look at. Do your due diligence and research when you're evaluating a firm or fund for investment potential.
If you prefer funds, consider these two funds that focus on stocks with woman CEOs:
- Pax Elevate Global Women's Index fund (PXWEX). This fund invests in the top stocks of companies advancing women's leadership.
- SPDR Gender Diversity Index ETF (SHE). This recently launched ETF investments in companies with women in CEO, board, or senior leadership positions.
If you prefer to buy single stocks, here is a list of S&P 500 companies with women CEOs:
- Mary T. Barra, General Motors Co.
- Corie Barry, Best Buy Co., Inc.
- Gail K. Boudreaux, Anthem, Inc.
- Rosalind Brewer, Walgreen Boots Alliance
- Michele Buck, The Hershey Co.
- Debra A. Cafaro, Ventas, Inc.
- Safra A. Catz, Oracle Corp.
- Joanne Crevoiserat, Tapestry
- Jane Fraser, Citigroup, Inc.
- Adena T. Friedman, Nasdaq, Inc.
- Lynn J. Good, Duke Energy Corp.
- Tricia Griffith, The Progressive Corp.
- Vicki Hollub, Occidental Petroleum Corp.
- Jennifer M. Johnson, Franklin Resources, Inc.
- Reshma Kewalramani, Vertex Pharmaceuticals, Inc.
- Christine A. Leahy, CDW Corp.
- Karen S. Lynch, CVS Health Corp.
- Judy Marks, Otis Worldwide Corp.
- Lisa Palmer, Regency Centers Corp.
- Kristin Peck, Zoetis Inc.
- Linda Rendle, The Clorox Co.
- Barbara Rentler, Ross Stores, Inc.
- Lori Ryerkerk, Celanese Corp.
- Lisa Su, Advanced Micro Devices, Inc.
- Julie Sweet, Accenture
- Sonia Sygnal, Gap, Inc.
- Carol Tomé, United Parcel Service, Inc.
- Jayshree V. Ullal, Arista Networks, Inc.
- Kathy J. Warden, Northrop Grumman Corp.
It's not a surprise that women in leadership positions move companies forward financially. If you're convinced by the research, examine this list of women-run companies, and run them through a thorough analysis. You might find some worth investing in.