SMEs with female board members are less likely to go insolvent research shows

According to research by KSA Group, SMEs in the UK with mixed gender boards are less likely to become insolvent than those with all-male boards and all-female boards.

Mixed Gender Boards

Insolvency rate statistics by board gender

Insolvency Practitioners, KSA Group Limited looked at the insolvency rate of the UK’s 1.5m companies with two or more directors in the last 12 months to June 2019. The research showed that:

  • the insolvency rate is 49% higher in all-male boards when compared to mixed boards
  • the insolvency rate is 32% higher in all-male boards when compared to all-female boards

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

The reasons for which are unclear but the findings do echo a recent study by Morgan Stanley, who found that organisations with more gender equal boards have outperformed their less diverse peers by 2.8 per cent per annum in the last eight years.

Robert Moore, Marketing Manager for KSA Group, said: “This is the second year that we have researched the role of gender in the insolvency rates of SMEs. Last year we found that female dominated boards had a lower insolvency rate than male dominated boards. This year we looked at the role of gender diversity and found that mixed boards had lower insolvency rates than both all-male and all-female boards. 

“Whilst it is not possible 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.”

See also

How to develop a more gender-balanced workplace

Full-time gender pay gap widens to 8.9%

Company insolvency statistics - Q3 2019

Image: Getty Images

Publication date: 6 December 2019