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Banks favor women CFOs, study says

Thursday, December 29, 2011  
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Women chief financial officers secure lower bank-loan prices than their male counterparts, according to a new study from Rensselaer Polytechnic Institute.

Looking at a sample of S&P 1500 companies over more than 10 years, RPI found companies with women finance chiefs received loan rates 11 percent lower than companies with male CFOs. Women also won loans with longer maturities and were less frequently required to provide collateral, according to a report by CFO magazine.

Women CFOs may have more luck with bank loans because they tend to be more risk-averse -- and banks know it, according to the study’s authors. Earlier research showed companies with female CFOs tend to use more conservative accounting policies and issue debt less frequently, CFO reported.

Women served as the top finance executive at just 104 of the S&P 1500 by 2006, the end period covered by the study. At the start of the study period in1994, there were only four female CFOs in the group.The gender of CEOs and other top executives did not have the same effect on loan contract terms as did the gender of CFOs. That suggests banks may view CFOs as the key risk factor in lending decisions, the study said.

In 2009 CFO reported on a study that concluded the stock markets react more favorably to both acquisition announcements and secondary equity offerings made by companies with female CFOs.

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