Ceo effect: 21% more female managers with a woman at the top

A female CEO brings more women to the top. Companies led by a female CEO have on average 21 per cent more women in the top management team than those led by a man. The evidence emerges from a study of 153 Italian companies by Professor Paola Rovelli of the Free University of Bozen/Bolzano and Professor Marco Mismetti of the Stockholm School of Economics, published in the Journal of Business Research.

The mechanism identified by the research is twofold. On the one hand, the presence of a woman at the top produces a role-model effect: that is, it makes the possibility of reaching top roles visible to all and strengthens the aspirations of internal managers. On the other hand, female CEOs tend to activate more inclusive professional networks and select talent according to more merit-based criteria, affecting both the attraction and the retention of female talent.

But the decisive figure concerns governance. Yes because, these positive effects only manifest themselves if the board of directors delegates at least 58% of strategic decisions to the ceo. Below this threshold, the positive correlation disappears. In other words, the formal presence of female leadership is not enough: substantial power is needed. "It is not enough to appoint a woman as CEO," Professor Rovelli observes, "what really makes a difference is that she has the authority to form top management and take strategic decisions. In a country where only 11 per cent of medium-sized companies are led by a woman, this is crucial.

The picture becomes more complicated if we look at the ownership structure of family businesses, which make up more than 70% of Italy's production fabric: in these contexts, the dynamics of appointments and promotions tend to respond above all to criteria of family continuity, favouring the maintenance of the status quo rather than the variety of skills. But this trend diminishes the propensity for innovation and equality. The confirmation comes from a study published in the Journal of Product Innovation Management by Professors Rovelli and Mismetti, together with Professors Cristina Bettinelli and Mara Bergamaschi of the University of Bergamo, conducted on 393 Italian companies.

The survey also underlines the importance of organisational culture: in patronising companies, where confrontation is stifled, it is more difficult to foster innovation and gender equality. In fact, functional diversity, even when present, only produces positive effects if there is a culture of open discussion, i.e. real freedom to express doubts, dissent and unconventional ideas. A condition favoured precisely by female leadership. A virtuous circle is thus triggered: when a woman at the top has real power, the effect is reflected in the composition of the management, accompanied by greater cohesion, innovation and empathy, as well as greater profitability, resilience and social impact for the company itself.