Mixed-sex-led firms less likely to go bust

According to new research, UK businesses with mixed boards are less likely to become insolvent than those with either all-male boards or all-female boards, although all-male-led boards are more likely to go bust than those led entirely by women.

The research found that the insolvency rate is 49 per cent higher in all-male boards than mixed boards, and the insolvency rate for all-male boards is 32 per cent higher than for businesses with all-female boards.

According to the study, the insolvency rate for male-dominated boards was 0.63 per cent, for female boards it was 0.48 per cent, and for mixed boards, it was 0.43 per cent. These rates suggest that mixed boards are more likely to avoid insolvency than businesses run by either all-male or all-female boards.

The research also shows that only 10 per cent of insolvencies went into administration, which might reflect the fact that administrations are more applicable to larger businesses. Interestingly, far fewer female-run companies used this tool, compared male-run concerns, probably because there are very few large all-female-run companies.

Moreover, the research found that 25 per cent of all insolvencies occurred in the London area, and more female-run businesses in London became insolvent than any other type of business in the area.

As one of the report’s authors commented, while it is impossible to prove that women are better at running businesses than men, the body of evidence is growing that companies that have women on the board do reap benefits in terms of increased profitability and less failure.

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