Wall Street loves its women -- as long as they're in the senior executive suite

Newly public companies that have women in senior management enjoy higher initial public offering prices and higher earnings per share than companies that have all-male management teams, according to a study by university of Michigan Business School professor Theresa Welbourne.

Welbourne and her researchers have been tracking the data since 1988, when they found no women in the top management teams of 134 companies that went public. By contrast, 41 percent of the 895 companies that went public in 1996 had female senior executives.

Welbourne's statistics, crunched from Securities & Exchange Commission documents and stock performance charts, did not attempt to answer the question of why or how women executives boosted the stock price or earnings per share. But Welbourne, who is also chief executive of research company ePulse, speculated that the conclusion correlates with another trend: the growing number of women who defect from large corporations to work at startups or create their own businesses.

"One of the more striking suggestions that this research makes is that talented women may be leaving larger companies where ingrained corporate culture may have created a glass ceiling for women executives, and they are moving to smaller companies where they can have an effect on the direction of the company," Welbourne said.

"Talented female executives may well be making the difference for these smaller companies in the post-IPO period."

Welbourne has never compiled similar statistics for more established companies, and the research is limited to businesses that have been public for no more than three years. But she said executives throughout corporate America may learn significant lessons from the relatively young companies she studies.

"IPOs either sail off and do well, or they tank very quickly," Welbourne said. "They are the fruit flies of management because of their short life spans. Everyone can learn from them."

Sceptics might counter that Welbourne's conclusions, though statistically valid, are not necessarily sound: the relatively solid financial performance of many newly public companies may not be due to a woman's presence in the executive suite but rather the unprecedented stock market bull run of the late 90s.

The rally lifted the fortunes of many US companies, particularly small technology ventures with Internet orientations -- the kind of anti-establishment, anti-hierarchic businesses that lured many women from traditional jobs.

As the stock market continues to wither, technology startups postpone IPOs, and the United States braces for a possible severe economic cooling in 2001, will Welbourne's research turn to bunk?

"I don't think so," Welbourne retorted. She admits that the many technology companies in the early days of her research recruited women with healthy stock option packages, flexible hours and telecommuting privileges. But she thinks her research applies equally at a Detroit-based automobile manufacturer in 2000 or at a San Francisco-based e-commerce outfit in 2003.

"We've looked at data from 1993, 1996 and 1999, and we're seeing the exact same pattern," she said. "In 1993, there were no dot-coms, and there wasn't the technology bull market. We were studying the impact of women executives of companies that went public at the time -- steel companies and manufacturing companies -- not in the technology industry."

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