Women-led companies outperform African stock exchanges

In 2022 the share performance of African companies headed by women was ahead of that of male-led counterparts, according to a new report on Africa’s top women CEOs. Charles Dietz reports.

While only a fraction of companies listed on Africa’s 24 stock exchanges have women CEOs, those that are led by women outperform financially by a wide measure according to a report from Africa.com.

For the third year running, Africa.com analysed the companies listed on Africa’s 24 stock exchanges to establish a definitive list of those led by women. It examined the performance of companies in which women hold the top position, and found that their collective market capitalisation was up 2.8% for the year ended 31 December 2022, outperforming many stock exchanges in Africa and across the world.

“This was a remarkable performance in light of conditions globally, and especially in Africa,” said Teresa Clarke, chair of Africa.com, as she presented the results by video link.

The share prices of the firms run by women

CEOs outperformed the Johannesburg Stock

Exchange (FTSE/JSE All Share) by 506 basis points; the Nairobi Securities Exchange Index (NSEASI) by 2,712 basis points; the London Stock Exchange (FTSE All Share Index) by 1,202 basis points; and the S&P 500 by 1,714 basis points.

Why do women-led firms outperform?

“Less than 1.3% of the $69 trillion global assets today are under management by women, let alone women of colour, but those women actually deliver a higher [return] than the men, on average. Clearly, women’s performance is stronger,” Vera Songwe, fellow at the Brookings Institution and former head of the UN Economic Commission for Africa, told Clark during the presentation. She was referring to a 2019 study that found firms owned by women and minorities handle just 1.3% of the $69 trillion in assets managed by the financial-services industry worldwide.

Referring to the findings of studies she had carried out at the World Bank, she said that women traders paid their principal and serviced their debt much faster, and were able to borrow and grow bigger businesses faster.

“We see exactly the same thing when we look at the private equity and venture capital spaces. When you look at 1.3% of $69 trillion you know there is a problem,” she stated.

Another participant in the presentation, Patricia Lizarraga, founder of

Hypatia Capital, commented: “Why do women outperform? Because it’s just harder for women to get to the top. So the ones that do by definition have something extra.”

Her opinion was echoed by Owen Omogiafo, president and CEO of Transcorp, who said: “We have to work harder, that is the reality. And while you have people rooting for you to succeed, there are also people watching for you not to succeed so that they can confirm that a woman could not do it. So for that reason, we’re very deliberate, we’re very driven to succeed.”

She suggested that companies run by women have better employee engagement and that this was an area that merited more empirical research.