Indian Women in Banking Industry: Breaking the Glass Ceiling?

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According to a study conducted by Harvard Business School Professor Boris Groysberg, women place greater emphasis than men on external business relationships and conduct better research on potential employers.³⁴ They tend to do the job offered to them with due diligence compared to men.

Researches in Europe and US and various studies suggested that companies with more number of women at senior positions tend to perform better financially.³⁵ In addition, recruiting and retaining women at all levels enlarges a company's talent pool and can meet the shortages at industry slowdowns. According to the research conducted by The McKinsey Quarterly on the relationship between organisation and financial performance and number of women executives found, among the companies for which information on the gender of senior managers was available, those with three or more women on their senior-management teams scored higher on all nine organisational criteria than with companies with no women at the senior level.³⁶

It was also proved that companies with women at top levels show better organisational and financial performance. In fact, studies have proved that organisations, which create female-friendly environments seem to reap a competitive advantage.37 A study conducted by Catalyst (a corporate membership research and advisory organisation) found that, for the period 1996-2000, the companies (Fortune 500) with the highest representation of women (the top 25% on representation), fared substantially better than the companies with the lowest representation (the bottom 25%).38 According to Catalyst researches, the more women on a company's board of directors, the more women are likely to be among that company's senior management.39 According to a Sunday Economic Times' study, nine40 listed companies managed by prominent women promoters fared better than the top 30 firms listed in the Bombay Stock Exchange (BSE) in year-on-year growth rates for the last 5 years.41 Besides, the study found that the nine companies during the last 5 years grew by a Compounded Annual Growth Rate (CAGR) of around 35% on the key parameter of income before tax as against a 21% CAGR for the BSE-30 firms.42 Over the past 5 years, these companies (headed by women executives) showed an increase in profits by 56% whereas the BSE-30 companies posted a growth rate of 27%.

What does the considerable presence of women executives at the top levels in the banking industry indicate? Do women make better bankers? If organisations headed by women are showing better financial performance, then should every industry, which is crucial for an economy be led by women?

33]"If more women had been bank executives the crisis could have been averted...", http://www.ecommerce-journal.com/news/ 17308_if_more_women_had_been_bank_executives_the_crisis_could_have_been_averted_reall?drgn=1, August 7th 2009
34]Lagace Martha, "What Women Stars Know about Succeeding at a New Job", http://hbswk.hbs.edu/pdf/item/5949.pdf, August 4th 2008
35]Desvaux Georges, et al., "A business case for Women", The McKinsey Quarterly, September 2008
36]"A business case for Women", op.cit.
37]"What Women Stars Know about Succeeding at a New Job", op.cit
38]"Firms with more women in top management earn more profits", http://www.financialexpress.com/news/firms-with-morewomen-in-top-management-earn-more-profits/280878/1, March 5th 2008
39]"Women on board bring more women to top jobs", http://www.financialexpress.com/news/women-on-boards-bring-morewomen-to-top-jobs/339958/1, July 24th 2008
40]Kiran Mazumdar Shaw of Biocon, Sangeeta Reddy of Apollo Hospitals, Shobha Kapoor of Balaji Telefilms, Meher Pudumjeeof Thermax, Swati Piramal of Piramal Healthcare, Shobhana Bhartia of HT Media, Sulajja Firodia Motwani of Kinetic Engineering, Sminu Jindal of Jindal Saw and Rajshree Pathy of Rajshree Sugars & Chemicals.
41]Rawani Anand, "Women promoters beat big daddies", http://economictimes.indiatimes.com/News/News-By-Company/ Corporate-Trends/Women-promoters-beat-big-daddies/articleshow/4240125.cms?curpg=1, March 8th 2009
42]Ibid.