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How do Companies Perform with Female CEOs?

There are a handful of factors that data has shown can create a better, more sustainable business and one of which is establishing gender diversity among your decision makers.

Having female leaders on your side has proven to be more of an advantage than the industry realizes for a variety of reasons. From women who have founded successful startups to women who make their check as venture capitalists, the need for a diverse board can function for a lot of businesses.

Karen Rubin, the Director of Product for Quantopian, is a prime example of this. Quantopian is a crowd-sourced platform to back the best investment algorithms with investor capital, trading operations, and technology.

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Quantopian is backed by Khosla Ventures, Spark Capital and Bessemer Venture Partners which attests to the bright future of the tech company. Rubin was initially interested in the idea because she felt she could apply her female leadership role to increasing the stock performance of participating companies and from that became Quantopian.

Although Rubin’s focus wasn’t just around her own place as a female leader in a prominent position, but women in business all together. Starting in 2002 and through the year 2014, Rubin manually input the start and end dates for each woman CEO’s tenure.

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Her algorithm calculated the returns to investors in every Fortune 1000 company when it was led by a woman. She then compared those results to the performance of S&P 500 companies. Rubin found that for the women-led companies, the performance seemed to top that of the S&P 500 companies with a 340% return vs. 122% for the S&P 500 benchmark.

Shark Tank investor Kevin O’Leary recently spoke about his insight into his own businesses run by female leaders as well and he was outward in saying that all of those companies are showing returns.

O’Leary told Business Insider, “All the cash in the last two quarters is coming from companies run by women.” He went on to say, “I don’t have a single company run by a man right now that’s outperformed the ones run by women.”

To give a point of reference, O’Leary has 27 companies in his portfolio and 55% of that roster is led by female CEOs. But O’Leary’s most interesting point may be that the companies he is referencing are across multiple sectors which doesn’t seclude the success of this gender to a particular industry.

We often hear that women in decision making positions offer viewpoints from a perspective in need and that seems to be undeniably true. But are we overlooking the fact that considering a women in these positions of power is just about evaluating experience and talent just like anyone else?

Nonetheless, women currently occupy 22 CEO positions at S&P 500 companies and that statistic is sure to increase in the coming years.