The Influence of Female Corporate Leadership on the Profitability of Leading Canadian Businesses

The rise in female corporate leadership plays a transformative role in driving innovation, fostering inclusivity, and enhancing firm performance. Despite a greater focus on female representation in management teams, executive officers, and executive boards, women encounter various obstacles that make it challenging to contribute in ways similar to those of their male counterparts. Previous research has recognized the relationship between female leadership in a company and the profitability of that company. While there is a lack of academic literature to suggest a positive correlation between female Chief Executive Officers (CEOs) and profitability, numerous studies find that female CEOs play a crucial role in adopting hiring practices and promotion systems that emphasize gender equality. The trend of greater proportions of female executives being correlated with greater profitability has been thoroughly analyzed by various researchers. This study utilizes data from annual reports of the leading Canadian businesses with and without female CEOs from 2020-2023 to calculate their net profit margins as a metric of profitability. The net profit margin for each year is then compared to the percentage of female executives to observe the relationship between female corporate leadership and profitability. The findings from this study indicate that female CEOs alone do not have an impact on profitability, but by encouraging other women to step into executive and management positions, they indirectly improve a firm’s performance. This study finds a positive correlation between the percentage of female executives and the profitability of a firm, underscoring the importance of female representation in business.