New Study Shows Female-Run Businesses Yield Better Long Term Results

Facebook COO Sheryl Sandberg taught women to ‘Lean In’ with her book, and Huffpost founder Arianna Huffington is teaching women to ‘Thrive’ with hers. It turns out, they are onto something! A new study by Fortune Magazine has revealed companies led by female CEO’s yield better long term results on the stock market.

In 2014, there were 51 companies on the Fortune 1000 list recorded as being helmed by a woman, a number that has not necessarily been talked about much outside of female blogs, but is definitely important data to share. The Fortune 1000 list is of the 1000 largest American companies, ranked on revenues alone. The Fortune 500 is the subset of the list that is its 500 largest companies.

From 1998 to 2014 the number of female CEO’s has steadily increased, with a short drop in 2009 due to the economy crash, but we are making slow and steady ground. It’s also interesting to note that fewer than half of the female CEOs on the Fortune 1000 list have an MBA. So it turns out Richard Branson and Mark Zuckerberg being college drop-outs aren’t the only types of anomalies people should be talking about in the business world!

The most common college major among Fortune 1000 female CEO’s is engineering, which is why there is a huge push to encourage more and more women and girls to get interested in the STEM fields. According to data from Verizon, there are currently over 3 million unfilled STEM jobs in the United States, yet it is the fast growing sector, outpacing the rest of the economy by 300%. There is no statistic saying women can’t fill those positions by the way, so hopefully studies like this can encourage more females to be ambitious in those fields.

The top three industries with female CEO’s on the Fortune 100 list are (in order of first to third) specialty retailers, food production & services, and gas & electric utilities.

Only 5% of Fortune 1000 companies are led by women, yet they generate 7% of the list’s total revenue. Fortune also found that those companies outperformed the S&P 500 index over the course of their leadership tenures. It may still only be a small percentage at this stage, but the steady increase and rising numbers clearly show that women running large companies and corporations get better results over a long period of time.

Mic writer Sophie Kleeman suggests this might not be a gender-based argument, which is actually a good thing!

“It’s difficult to pinpoint why female-led companies do better. These CEOs could be better at understanding their companies; they could have superior management skills, better judgement and luck. In other words, their gender might be irrelevant: They could simply be better at their jobs.”

Back in February, Business News Daily published the findings of a study by Cornell University which delved into the female-run business conversation on a different scale. It said female ownership is the key to surviving over the long haul for many businesses, whether big or small.

“We find that female-owned businesses consistently out-survive male-owned businesses in many industries and areas,” said Michele Williams, one of the study’s authors and an assistant professor of organizational behavior in Cornell’s Industrial and Labor Relations School.

She said that when the majority of these types of studies are done, they consistently come up with the opposite results because they look at the business market as a whole, instead of breaking it up into industry categories giving more accurate data.

Their study found that there were four main sectors where women-led businesses outperformed men: educational services and dance studios, clothing, gift giving and alcohol sales and service.

“One of our more surprising findings was that eating establishments that serve alcohol as well as drinking establishments survive longer under female ownership,” said Arturs Kalnins, one of the study’s authors and an associate professor of strategy at Cornell’s School of Hotel Administration. “This goes against some stereotypes that restaurants and pubs are male-dominated businesses.”

Further afield, another study published by the Kellogg School of Management in April showed that ethnically diverse countries suffer from slow economic growth, except when there is a female leader.

All of these studies, statistics and data collectively show one thing: women are great at being leaders of companies, whether large or small. Women have the capacity to take companies much further than perhaps critics or industries think, and corporations and board members would actually benefit from having more women on their team.

Let this be a motivation to all you female entrepreneurs, let nothing stand in your way from achieving your best in business. You now have the data to back it up; businesses need what women have to offer, whether you start one yourself, or you work for an already established company. Lean in, thrive and just go for it!