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Companies do better with more women leaders, study shows

Wednesday, October 26, 2011  
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There is a strong correlation between how well corporations develop and promote their female leaders and how successful those corporations are in the marketplace, according to new research by the Eastern Michigan University College of Business.

The Michigan Women's Leadership Index, a biennial survey that looks at female board members and senior executives at the 100 largest publicly held corporations headquartered in Michigan, found women hold 10.37 percent of the 849 board seats at Michigan Index 100 companies. That's up from 9.6 percent of total board seats in 2003.

Among Michigan's Fortune 500 companies, women hold 35 ( 17.86 percent ) of the total 196 board seats -- up nearly six percentage points since 2003. For the first time, women directors make up 36.36 percent of the boards of three large companies: General Motors, Kelly Services and Steelcase.

"Research provides a strong correlation between women's leadership and the success of enterprises that do a good job of fostering it," said Megan Endres, a professor of management who served as lead researcher for the 2011 index. "Women corporate leaders bring male-dominated companies a diversity of outlooks and opinions that they otherwise would lack. That leads to better decision making, fewer mistakes and, potentially, higher profits over time."

The number of Michigan Index 100 companies with at least one woman listed among their top-compensated executives has moved from a low of 16 in 2005 to the high of 36 in both 2009 and 2011.

"Now that 60 percent of new college graduates are women, the war for the best and brightest talent will favor those companies that foster women's leadership,” said Terry Barclay, CEO of Inforum Center for Leadership. "Employers need to be seen as organizations where women can lead and succeed.”

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