When Women Take Over Family Firms, Profitability Increases

March 24, 2014 Editor 0

A study of thousands of family-owned firms in Italy reveals that, on average, replacing a male CEO with a woman improves a company’s profitability, an effect that becomes more pronounced as the proportion of women on the board of directors increases, says a team led by Mario Daniele Amore of Bocconi University in Milan. Overall, the more women on the board of a female-led firm, the more profitable it is likely to be. The presence of women directors may make female CEOs feel more comfortable, improving cooperation and facilitating information exchange, the researchers say.

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Categories: HBR, Insights