Evaluation of the effect of women in top management on companies' performance

Abstract

This study examined whether the presence of women in top management positions affects firms‘ performance. This study became necessary given that, whilst there is a growing call for gender equity in top managerial positions, many companies are still hesitant, as some trust that the presence of women in top management positions might weaken their market value. The main purpose of this research was to analyse the link between women in top management positions and net profit, sales turnover and share price. Secondary data on women in top management positions and companies‘ performance were collected from integrated report archives of twenty-nine (29) companies listed in the FTSE/JSE Responsible index for six years, 2010 to 2015. This study was theoretically inclined on the Resource Based Theory and related current literature. A quantitative research design was adopted. Regression statistics utilizing the Excel Spreadsheet software was used for data analysis. Findings from the statistical analysis disclosed the following: within the twenty-nine (29) companies examined, firstly, existing positive relationship between women in top management and net profit, although not significant. Secondly, there was a negative relationship between women in top management and sales turnover. Thirdly, there was a positive relationship between women in top management and share price, although not significant. The research implication and contribution are that companies that encourage women to ascend management positions may not necessarily lose market value and net profit as feared by some companies around the world. In addition, the study recommends that women in top management should have a deputy that works closely with them such that when they take family leave, these deputies will function without company performance, such as sales, dropping its value. The findings provide further research agenda on the linkage between women in top management positions, net profit, sales turnover and share price using a larger sample of companies across industries.