Women are still vastly underrepresented at the top of companies. Only 20 per cent of private companies have one or more women in the C-suite and only 6.5 per cent have a female CEO.
A new report on a huge study of VC backed companies from Dow Jones Venture Source highlights what a huge error that is:
- The average percentage of female executives at successful companies was 7.1 per cent, versus 3.1 per cent at those that are unsuccessful.
- 61 per cent of startups with five or more women executives succeeded, and 39 per cent didn’t.
- That’s all under a very strict definition of success. Success is an IPO, IPO registration, consistent profitability, or a profitable exit. Unsuccessful companies either exist but haven’t reached those goals, have been acquired at a loss for their backers, or have gone bankrupt.
One metric of success is IPOs, which have been more common for companies that have female executives:
Photo: Dow Jones VentureSource
The idea that having more women at the top leads to success isn’t a novel claim. Public companies that have women on the board have been shown to perform better.
Still, companies are so slow to add them that the EU’s attempting to make it a legal obligation.
Whether you’re a VC looking to make an investment, or a company looking to make it to the next level, make sure the executive team isn’t a boy’s club.
Find the full report here.
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