A recent study by Company Rescue has revealed a notable gender disparity in business insolvency rates. The research analysed over 4 million UK SMEs to determine whether there was a correlation between the gender of a company’s board and its likelihood of entering administration or liquidation.
Key Findings:
- Male-led companies were found to have a 71% higher insolvency rate compared to female-led businesses.
- While there are some industry differences between male and female-led businesses (e.g., construction is more male-dominated, education is more female-dominated), these disparities do not fully explain the higher insolvency rate among male-led companies.
Interpreting the Results
Keith Steven, MD of Company Rescue, cautioned against drawing hasty conclusions. He noted that several factors, such as industry trends and economic conditions, could contribute to the observed difference. However, he also highlighted the consistent pattern across multiple studies:
- 2018 vs. 2024: While the specific industries associated with female-led insolvencies have shifted (from property to retail and education), the overall trend of lower insolvency rates for female-led businesses persists.
- Potential Explanations: Steven suggested that women may exhibit greater financial acumen or a more cautious approach to risk-taking, leading to improved business performance and lower insolvency rates.
While further research is needed to fully understand the underlying causes of this gender disparity, the findings of this study raise important questions about the factors that influence business success and failure.
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