Money-Savvy Women Could Save the World

Men are beginning to look increasingly red-faced, because it turns out that women are better at a lot of things that men used to think they were top dogs at.  Like driving, for example – who knew?  Now there’s plenty of evidence to suggest that women are better at handling money and running companies, and there are plenty of numbers to suggest that having one or more women on your board, or in the CEO’s office, can dramatically improve company performance.

Of course, stereotypes die hard, and some refuse to let them go. The women who are going to save the world are not the ones earning $40k, spending every last cent of their income on renewable goods and racking up credit card debt. It’s the women with years of business education, a stack of ambition, and a talent for leadership.

After reading what I’m about to reveal about women in positions of power, you might also be scratching your head wondering why women only occupy 16% of Fortune 500 board seats, and less than 3% of CEO positions – even though they make up 47% of the workforce.

As it turns out, women are better at just about every skill you need to have to make it to the top in business, and to run a company successfully, profitably and ethically.

Women Are Nicer People

Women tend to use more than their brain when making business decisions.  This leads to slightly more ethical, as well as more thorough, decision making, a recent study found.

A lot of the financial crisis has been blamed on the type of thinking that goes on in the Old Boys’ Clubs of Wall Street banks and other firms. The study showed that when one or more women are involved in decision making, decisions tend to be more moderate, more multi-lateral, and further away from the boundary between legality and grand larceny.

Women Are Better Investors

This is a simplistic way of saying that women are more risk-averse, which tends to suit the overwhelming majority of financial climates.  During brief but massive bull runs, a gung-ho male investment strategy that puts it all on the line will win often out, but over longer timescales it has been shown that female investors and hedge fund managers outperform their male counterparts by 1% a year.

In the professional investment industry, that 1% edge on your competitors is something most managers would sacrifice their firstborn sons for.

Women Improve Company Culture

It can be difficult for a woman to get onto an all-male board, but once it happens it is almost universally good for company culture, morale and profits, as Fortune editor Patricia Sellers said: “For women, power is more about influence than control, more horizontal than ladder-like. And when it comes to building businesses, it's about creating the companies we want to work for.”

Principal Financial Group CEO Larry Zimpleman stated, as regards gender diversity in the boardroom, that: “There’s a growing body of research that indicates that women are more balanced and thoughtful in making important decisions. So, if improving a company's performance is of interest, then having good gender balance in key management positions as well as on your board will help achieve that objective.”

Women Help Avoid Bankruptcy

Not only that, but they’re better for the bottom line in general, a recent Leeds University study has shown.  They found that companies with at least one woman on the board had a 20% lower risk of bankruptcy, and that having three or more female board members increased sales by up to 73%, controlling for industry-specific factors.

A Pepperdine University study tracked performance of Fortune 500 companies and found that “correlation between high-level female executives and business success has been consistent and revealing.” The question comes to mind again: what if it had been the Lehman Brothers and Sisters?

Becoming a Financially-Empowered Woman

Getting to the top of a Fortune 500 company doesn’t happen overnight, especially for women in what is effectively still the “man’s world” of high finance and boardroom politics. It starts with paying attention to your own finances, seeking out positions where your leadership abilities will be recognized, and improving your chances by furthering your business education online.

For more information, Learnvest.com is a personal finance site for women which teaches women how to be financially savvy through fun educational programs.  Aside from them, Suze Orman is a well-respected female financial advisor who is full of useful information for women on everything from balancing a checkbook to rising to the top of an investment bank.

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