Enterprises with women in their boards perform better, says study

Study reveals that companies with at least one female member in the board perform better than those without women members.

Women power in corporations is on the rise. With more women being part of company boardrooms and rolls, there has been a major shift in the way enterprises go about doing things. In what may be seen as endorsing the current state of affairs wherein women in boardrooms have turned out to be a welcome change, a study has found that enterprises with women on their boards tend to perform better.

The study report courtesy of the Complexity Science Hub Vienna (CSH has in an analysis of the relationship between female board appointments and corporations’ financial performance, stated that the situation is more than welcome. The study has been done based on data from about 4,000 Japanese companies collected between 2004 and 2013. The study is by far the first large-scale analyses of female board members in Japan, and the samples collected are among the largest ever analysed for developed economies, a report quoted lead author of the study report and CSH researcher Matthias Raddant, as saying.

Steady increase in women board members

The study went about analysing the evolution of a group of women on company boards and their professional networks. The study was undertaken on topics such as which companies appoint them and what determines the slow but steady increase in female board members during the period under review.

As per the study, Japanese companies have women occupying close to 2 percent of board space, and there has been a slight increase over the study’s 10-year span. It has been reported that female board members in Japan firms is just 8 percent even in 2022. In comparison, in year 2022, 29 percent of corporate board seats were held by women in North American and European companies.

Women deal with multiple tasks

Though low in number, the female board members in Japan have begun changing their position in the networks of executives. Many of them deal with multiple mandates making themselves very important in their organisations. It has also been found that companies with at least one female member in the board have been performing better than those without a female board member.

It has also been found that firms that have good governance are more profitable and might also be better at facilitating the hiring of female board members. The study also points out that women have this tendency to connect with each other and support one another. Also firms with links with other companies that have women in their boards are more likely to appoint female board members.