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Do female CEOs outperform men? There aren’t enough to say

February 19, 2015
Diversity & Inclusion
The television segment was less than 60 seconds but it was enough to capture my full attention and interesting enough that it prompted many of my extended family to alert me to its existence.
At the end of Alan Kohler’s regular Finance Report, broadcast during the ABC 7pm News, last night he showed a remarkable graph. 
“Here’s a graph to get Australian boards and directors thinking. It shows the performance of US companies with female CEOs versus the general market index S&P 500,” Kohler told viewers.
And guess what it shows?
“Companies run by women do better than those run by men.”
His next line, however, was the real kicker.
“I can’t do that graph in Australia because the sample is too small here.”
Occasionally it is the little details that tell the bigger story best. The day before Kohler’s enlightening segment the Workplace Gender Equality Agency released research showing that the pay gap in management in Australia is as high as 45%. 
It’s astounding and poses many questions. Why are women at the pointy end of corporate Australia paid considerably less than their male peers? It is because they are actually worth less? Is it because their male peers are actually paid more than they’re worth? Both? What is it that causes the pay gap to perpetuate and even widen at this level? 
The pay gap that exists between fulltime earnings of men and women in Australia is 18.6%. It is a considerable gap and it reflects a number of factors including the different industries and roles that men and women tend to occupy. 
When the research is refined to a single segment like management, for example, those differences are less informative.  It is certainly more complex than one single factor but given the chasm between male and female managers is up to 45% in management, it’s hard to dismiss structural sexism as an influence.
Is this explained because corporate Australia still treats women as an anomaly? It seems possible because, in truth, they still are. Female managers are not the norm, any more than female-led publicly listed companies are.
And, as Kohler’s graph (view in article) so aptly illustrates, our companies are likely poorer for it.
The fact female-led companies out-performed the industry average in America doesn’t mean that every single female CEO will always outperform a male CEO. It’s obviously more complicated than that but the data is persuasive that female-led companies do better than average. 
How ludicrous is it that here in Australia where women do not lack for educational opportunities or “merit”, there aren’t enough women running companies to even form a statistically-significant sample to prove it?
It indicates just how far Australia hasn’t progressed. We can’t demonstrate that Australian women are better or worse than men at running companies but we can prove that the women who eventually might are, in some cases, earning almost half their male peers are. Is this because they aren’t as good?
The research from America suggests not.  Unless, of course, the results simply show that managers in the US are better able to train and develop female talent than we are?
Whatever the explanation it’s absurd that we can only guess rather than form a conclusion based on evidence.
I am inclined, once again, to ask whether our Minister for Women caught Alan Kohler’s report last night? If so can we expect a response? Are you there Tony? 
By Georgina Dent

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