Do women in senior or top positions make a difference to a company?
According to research conducted by Harvard Business Review last June, women in leadership positions are perceived to be just as competent as their male counterparts, if not more so.
Female leaders were rated as excelling in taking initiative, acting with resilience, practising self-development, driving for results and displaying high integrity and honesty.
In fact, they were thought to be more effective in 84 per cent of the competencies that HBR most frequently measures, such as ‘drives for results’ and ‘innovates’.
Men were rated as being better on two capabilities: ‘develops strategic perspective’ and ‘technical or professional expertise’.
- Female leaders excel in many areas that men do not.
- There are not many role models for women in leadership positions.
- Men are more prone to risk-taking.
Chris Wagstaff, head of pensions and investment education at Columbia Threadneedle, says there is evidence to show women make very good fund managers – possibly better than male fund managers.
He cites research from 2009 by the French investment funds association AFG, which found that female fund managers produced more consistent and less volatile performance than their male counterparts.
Mr Wagstaff says: “The behavioural finance literature suggests that women do not succumb to as many damaging systematic biases, or cognitive errors, as men. Of course, it is always dangerous to generalise, and much depends on the personality of the manager, but it would seem that women are more analytical in their decision making.
“Women also appear not to blindly extrapolate perceived trends that more often than not prove to be just a series of random events that look like a trend. That is, they draw more extensively on their thoughtful ‘System 2’ way of thinking and less on their quick fire ‘System 1’ than men.”
Strengths and weaknesses
Another study that Mr Wagstaff points to was carried out in 2013 on 1000 brain scans, by the University of Pennsylvania.
The research argued that although women’s brains are 8 per cent smaller than men’s, they have more neural interconnections, with the left and right hemispheres – the logical and intuitive sides of the brain – being highly connected.
By contrast, men’s brains are typically stronger between the front and back regions. The front part of the brain is involved in planning, organising, problem solving, selective attention, personality and a variety of “higher cognitive functions” including behaviour and emotions, whereas the back region processes shapes and colours.
Mr Wagstaff says: “Consequently, women perform better at bigger-picture and situational thinking. They are also better listeners than men, employ more analytical reasoning as the behavioural literature suggests, and have a better reading of social situations.
“However, men are generally better at problem solving, performing mathematical tasks, processing spatial information about their surroundings, engaging in co-ordinated actions and have generally faster reaction times than women.”
Mr Wagstaff goes on to add: “When it comes to assuming risks, whether intended, unintended, potentially rewarded or not – all of which ultimately determine a fund manager’s performance – men’s brains are decidedly more geared towards risk-taking.”