- Finance technology company plotted how companies with female CEOs performed from 2002 to 2014
- Imagined $100,000 was invested in Fortune 1000 companies led by women, vs performance of S&P500 index
- Women’s index was ultimately worth $440,158 – return of 348% – while the other was worth $222,306, a 122% return
- High performing female CEOs included Yahoo!’s Marissa Meyer and HSNi’s Mindy Grossman
- Expert who ran experiment suggested results are because only most competent women make CEO
Kieran Corcoran For Dailymail.com
12:12 EST, 17 March 2015
17:14 EST, 17 March 2015
Companies run by women performed almost three times as well than those run by men, according to a new study.
Cash invested only in Fortune 1000 stocks from companies with female CEOs had a return of 348 per cent over the past 12 years, researchers found.
In the same period of time, a portfolio made up of stocks from the S&P500 index would have returned just 122 per cent.
The discovery was made by finance technology company Quantopian, which ran two imaginary $100,000 investment funds using stock data from 2002-2014.
Bringing home the bacon: A study found that Fortune 1000 companies with female CEOs produced returns of 348 per cent from 2002 to 2014, as shown in green on the graph above. For comparison, the S&P500 index, in blue, had a return of 122 per cent in the same period
Top of the pile: Mindy Grossman, CEO of HSNi (left), Debra Cafaro of Ventas (center) and Marissa Meyer of Yahoo! (right) all brought in substantial returns for shareholders during their tenures
At the end of the experiment, the women’s fund was calculated to be worth $440,158, while the S&P fund was at $222,306.
The women’s fund would hold stocks by all Fortune 1000 companies with female CEOs for as long as the woman was at the head of the company.
It would sell the stock whenever a woman left the top spot, and buy in to new companies which appointed women. Fewer than one in 20 major companies currently has a female CEO.
According to a report by Fortune magazine, the best performers were HSNi, which runs the home shopping network, and Ventas, a healthcare company which runs housing estates for the elderly.
HSNi has been run by Mindy Grossman since 2006, and Ventas by Debra Cafaro for the whole 12-year period – both women returned more than 500 per cent on initial investments.
Other high-performing female CEOs were Marissa Meyer at Yahoo!, Linda Lang at Jack in the Box and Carol Meyrowitz at TJX, a homeware and clothing retailer.
Some women dragged the pack down, however, including New York Times CEO Janet Robinson, whose eight-year tenure saw the company shed 80 per cent of its worth.
WHY DO WOMEN MAKE GOOD CEOs?
There is no definitive explanation for why female CEOs apparently bring in so much more cash for investors.
It has been suggested that typically female personality traits make for better corporate leaders.
Kip Tindell, CEO of The Container Store, has made 70 per cent of his executives female.
He told Business Insider: ‘Emotional intelligence is the key to being really successful. People who have it keep their egos in check; they’re comfortable with surrounding themselves with people better than them…’
However, it has also been suggested that female leaders can feel pressure more than male counterparts.
Mindy Grossman, one of the best-performing female CEOs of recent times, told Forbes that high-powered women are more at risk of burning out, too.
She said: ‘Being female, I’d say we have tendencies to want to be perfect at everything in every moment of everyday. The challenge is understanding how to allocate your time personally and professionally, and remembering you have to be a person too.’
Keeping on: Carol Meyrowitz, head of homeware and clothing retailer TJX, brought good returns for shareholders too. An exception to the rule was New York Times Company CEO Janet Robinson, who lost investors some 80 per cent of their cash
Kerrii Anderson, CEO at Wendy’s International also lost investors’ money in her tenure from 2006-08.
Karen Rubin, who helped build the simulation, said she believes the results are because of the so-called ‘glass ceiling’ holding women back from big jobs.
The result, she said, is that any women who wants to lead a huge company must be extremely competent – and so good financial performance follows.
She told Fortune: ‘There’s a lot of the theorizing around why the results are dramatically higher for the women, but most think it has to do with how hard women have to work to become CEO at such big companies in the first place’.
However, it has also been theorized that the results are also affected by the types of companies women have typically led – media, retail and consumer organizations – which benefited greatly in the recent economic upturn.
The female-only index also crashed more steeply than the S&P500 during the 2008-09 recession, but remained worth more overall throughout – and rallied more strongly afterward.