For the last decade, leadership development for women has been a focus of mine—both in my career and personally. Whether I’m delivering a corporate program or serving in a volunteer capacity on the Board of the Girl Scouts of Ohio Heartland Council, I love to make a difference by empowering emerging leaders with the tools they need to succeed.
The women I meet are smart, savvy and driven. So I wasn’t surprised when I saw the results of a recent study by the Peterson Institute for International Economics. It reveals that gender diversity in business is profitable.
In fact, “the results suggest that the presence of women on corporate boards and in the C-suite may contribute to firm performance. The impact is greatest for female executive shares, followed by female board shares; the presence of female CEOs has no noticeable effect,” the report says. “The estimated magnitudes of these correlations are not small: For profitable firms, a move from no female leaders to 30 percent representation is associated with a 15 percent increase in the net revenue margin.”
Yes—15 percent. That’s a significant boost. Here’s why, according to the report. “The positive correlation between the presence of women in corporate leadership and profitability could reflect the existence of discrimination against women executives, which gives nondiscriminating firms an edge. Alternatively, it could be that the presence of women contributes to superior performance via functional diversity.”
The bottom line is that diversity and nondiscrimination can pay off.
Unfortunately, even as recently as 2014, too few organizations were making gender diversity in the C-suite and the board room a priority. Of the firms surveyed by Peterson, about half had women in leadership positions, and 60 percent had no female board members.
What’s the reason behind the gap? Why are women in corporate leadership positions relatively scarce? The report cites a few reasons:
• At the firm level, the size of the company and the size of the board are robustly correlated with the presence of women on boards and in the C-suite (though not as CEOs).
• The results also suggest that a set of national characteristics—including high scores on math assessments, concentrations in degree programs associated with management, and the ratio of female to male income, which could be interpreted as indicators of institutional openness to women’s success—is robustly correlated with these outcomes.
• The results also point to other correlates that could be overlooked, including discriminatory societal attitudes, the importance of paternity as well as maternity leave, and openness.
Take a look around your office. Are women represented at leadership levels? If not, consider advocating for leadership development programs targeted to women. Contact us for help.
In the meantime, I invite you to watch this short video about transforming your leadership presence.