Even with the exceptional progress that women’s movements have made in the business world in the last hundred-plus years, women are still not being represented as they should be in management and executive positions. If the ethical aspects of gender equity aren’t enough to drive you to break the glass ceiling in your own business, consider these statistics on how female leadership can bring profit and success to your company or firm.
Where We’re At Now
Today, more than ever, women are succeeding in business and obtaining leadership positions. However, that growth has been slow – women’s involvement in corporate leadership is still dismally low when compared to just how many women there are in the workforce.
According to the 2012 Catalyst Census, a research study performed by an organization with the mission of expanding business opportunities for women, women held only 16.6% of all board seats at Fortune 500 companies (women of color, specifically, held only 3.3% of seats). A full tenth of companies surveyed had no women on their boards. Under one-fifth of companies surveyed had boards made up of over 25% women.
Even outside of the boardroom, women are struggling to gain recognition for their work, and continue to come up against the proverbial glass ceiling that keeps them from climbing the corporate ladder.
Another 2012 Catalyst report, entitled Good Intentions, Imperfect Execution? Women Get Fewer of the Hot Jobs Needed to Advance highlights an addition issue. This report states that, on average, men receive more promotions, more international assignments, larger project budgets, and more high visibility jobs with more profit-based responsibility than do women.
Think about your own business. Who fills leadership roles? Who do you see at networking events, and who runs your competition? While there are certainly businesses that have reached better levels of equity, especially in terms of small businesses, I’m willing to bet that most are yet to reach a 50/50 split in terms of power and responsibility.
It turns out that investing in women’s professional success isn’t only good for women, though. In fact, your business can greatly benefit from having more women in leadership positions. Here’s why.
Women Have Higher Levels of Education
In 2011, the United States Census Bureau reported that for the first time, women were outstripping men in terms of attainment of college and other higher education degrees. Looking at employed individuals 25 years of age and older, 37% of women held bachelor’s degrees, while only 35% of men had a bachelor’s degree.
While those numbers are small now, that gap is projected to increase in the coming two decades. In a recent OECD Higher Education report, described by women’s business opportunity organization 20First, women were projected to hold a full 57% of bachelor’s degrees in the US, and 63% of them globally, by 2025.
Depending on the exact nature of your business, this data may have little effect – women are apparently more likely to go into education, teaching, health, and the social sector, while men still hold more degrees in science and engineering. However, it’s clear that women are slowly becoming the majority in terms of who holds the educational and informational power that can help your business reach its full potential.
Women’s Presence Raises Group Intelligence
A June 2011 study conducted by professors at Carnegie Mellon University and the MIT Sloan School of Management found that groups containing more women had higher “collective intelligence” scores, leading to better problem solving.
The Harvard Business Review interviewed Professors Woolley and Malone, who lead the study. The researchers suggested that groups containing more women perform better as a team due to women’s tendency to communicate better and be more socially sensitive. Sharing criticism, keeping open minds to new ideas, and stepping back to let others share their ideas were all tendencies the researchers saw in women far more than they did in men.
While it’s more likely that these tendencies are due to differences in social conditioning than any inherent gender differences, it’s a useful thing to keep in mind, regardless. Having more women on your team can help improve the overall problem solving and communication abilities of your company.
Women Improve Management Quality
DDI’s Global Leadership Forecast 2011 suggests that there’s a strong correlation between leadership and management quality in a company, and that company’s performance in comparison to competitors’. A follow-up report found that businesses with a majority of female leaders had leadership quality ratings that were a full 50% higher than companies without as many women in leadership positions.
An older study from 2002, conducted by the Conference Board of Canada, found additional trends, and reported that executive boards with a gender-balanced set of leaders tended to govern their companies better. The study found that gender-balanced boards are more likely to consider the needs of stakeholders, conduct more frequent self-evaluations, pay more attention to conflict-of-interest guidelines, examine wider ranges of possibilities, and have better risk oversight.
Why do women improve management quality? Probably for many of the same reasons that the Woolley and Malone study found: women are socialized to put an emphasis on listening, communication, and collaboration.
Women Bring In Profits
Better management, of course, leads to better financial performance. McKinsey & Company’s April 2012 report, Women as a Valuable Asset, described a survey of 362 companies with varying levels of gender balance in leadership positions. The results were clear: businesses with more women on their executive boards or other leadership positions completely financially outshone competitors who did not have as many women on their boards.
The study found that companies with two or more women in leadership positions did 41% better than male-dominated competitors in terms of average return on equity, and 56% better than competitors on overall earnings before interest and taxes.
Jezebel reported earlier this year on another similar study by Credit Suisse Research Institute, which found that during the most recent financial plummet, companies that had women on their boards wound up with less debt, and were more likely to be spared from stock loss due to better risk management. Those companies’ sock prices were about 26% higher than those of competitors with no women on their board of directors.
These are not small margins. Having women in leadership positions in your company can do big things for your overall bottom line.
The Bottom Line – And Yours
There are plenty of reasons to break the glass ceiling and make room for women in business. Ensuring that women hold a number of leadership positions in your business that is representative of their overall numbers in the company as a whole means helping to put an end to countless years of discrimination, and demonstrates a strong commitment to diversity.
But if you need convincing beyond an ethical argument, think about what women in leadership positions can do for you and for your business. Women bring high rates of education to the office, as well as communication styles that can improve teamwork and problem-solving. And perhaps most importantly, businesses with larger numbers of women on their executive boards and in leadership positions outperform their competitors in terms of management quality and profits.
So, when it comes time to elect a new board member or hire a new manager, think about what women can bring to the table at your business.
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