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Co-Ed Management

Diversity in your management team can help your IPO soar.
- Magazine Contributor
2 min read

This story appears in the February 2000 issue of Entrepreneur. Subscribe »

Before taking your company public, you need the right people on your management team: people strong in financial strategy, investor and public relations, marketing and more. And, according to professor Theresa Welbourne at the University of Michigan Business School in Ann Arbor, some of those people had better be women.

Why? Because in Welbourne's Cornell University study, "Wall Street Likes its Women: An Examination of Women in the Top Management Teams of Initial Public Offerings, "she discovered that firms with women in the executive management spots fared much better immediately after an IPO was issued than those without. Women also positively impacted stock-price growth and earnings-per-share growth in these companies.

Welbourne credits this strong showing to one simple fact: diversity. "Diversity in management means people are bringing different ideas to the table," she explains. "This is important, particularly if you're a fast-growth IPO and have to make decisions quickly."

But just having women on the team isn't enough, continues the professor. The most successful newly public companies also had women in influential positions, listened to their input and then utilized them when developing corporate policies.

But don't go overboard, cautions Welbourne. It's not women per se that make the difference but rather the diversity in information-gathering and processing they represent that's critical to success.