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CEOs

4 Reasons to Leave Your Company to Your Daughter (Instead of Your Son)

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The status of women in the workplace is a frequent topic of conversation in the media. Only 27 CEOs of Fortune 1000 companies are women and wage inequality persists between men and women who perform the same jobs — but research shows that companies with women in executive positions consistently outperform those with all-male leadership.

You may not choose to leave your company to your kid at all. But if you do, here are four reasons why the best heir apparent might actually be an heiress.

  1. Better Bottom Lines

Companies with female CEOs make more money, according to a Fortune report. Although Fortune 1000 companies with women CEOs are few, these companies “outperformed the S&P 500 index over their respective tenures,” meaning that companies led by women have better performance than those led by men when it comes to stock market returns. On a related note, accountancy firm Grant Thornton found that companies with all-male leadership lose trillions of dollars in investment returns annually, compared with companies with gender diversity on their boards.

  1. People Prefer “Feminine” Leadership

“Macho” leadership is dying, according to a 2014 study by the Ketchum Leadership Communication Monitor. The study, which surveyed over 6,500 people in 13 countries in 5 continents, found that respondents reported that the top four traits necessary for good leadership were more likely to be found in female leaders rather than men. The attributes ranked as most necessary for good leadership were leading by example, communicating in an open and transparent way, admitting mistakes, and bringing out the best in others.

  1. The Domino Effect

Female executives who work for women CEOs are more likely to want to be CEO in the future, according to research performed by public relations firm Weber Shandwick and KRC Research. “Our research indicates that when women work for female CEOs, they are more motivated to strive to be corporate leaders themselves,” says Gail Heimann, president of Weber Shandwick. “These results lead to the undeniable conclusion that if we really want gender equality at the top, we must promote more women into CEO positions and do it now.” Female CEOs play a key role in laying the foundation for eventually shattering the glass ceiling.

  1. Democracy, Not Dictatorship

Companies with women CEOs have better relationships between executives and subordinates, and decisions are made more democratically. Researchers at the Universidad Carlos III de Madrid found that women CEOs were better at creating effective channels of communication between managers and junior employees, an important skill for a CEO to have. Companies that prioritize manager-employee communication and have female leadership have also been found to have higher levels of employee engagement. Engaged employees are consistently higher performers than disengaged workers — bringing us back to reason #1.

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