Gender diversity has become a buzz word in the business world. You might ask what does it really mean, and does it really matter?
From your perspective, of course it matters. You want the opportunity to lead. Of course it matters that products and services you buy have women involved in the decisions creating and producing them. It also matters that all companies, not just consumer companies, promote quality women into top positions where key choices are being made. These leaders (board of directors, C-suite positions and Vice President positions) make decisions that affect us — across large groups from employees, customers, our communities, to the environment and more.
However, it also matters to these businesses bottom line that women are a significant part of their leadership, not just token appointments. It is becoming increasingly obvious that companies with women in leadership positions are performing better.
Here is a sampling of recent news about diversity.
- Karla Bowsher, in her recent article in Money Talks News, cites two studies showing gender diversity improves results.
“Men and women have different viewpoints, ideas, and market insights, which enables better problem solving, ultimately leading to superior performance at the business unit level,” recent Gallup research states.
A separate study by McKinsey & Company found that gender-diverse companies are 15 percent more likely to financially outperform their industry’s national mean.
- In a Fast Company article about the same topic, Samantha Cole sites The Global Leadership Forecast as stating organizations ranking in the top 20% financially had twice as many women in leadership roles as the other companies surveyed.
- CBS News/Business cites the same McKinsey study of 366 companies stating companies with more balanced leadership do a better job recruiting and retaining talented workers, reducing the costs associated with replacing top executives. They also have stronger customer relations because management better reflects the diversity of society, and they tend to make better business decisions because wider arrays of viewpoints are considered.
- Quartz cited that Karen Rubin, director for a Quantopium product, studied Fortune 1000 companies for returns to investors when women were in leadership positions verses when not. Rubin found that for the women-led companies, the performance was much better: A 340% return vs. 122% for the S&P 500 benchmark.
With all this information to support women in leadership, the percentages have flat-lined since I graduated from Harvard Business School 30 years ago. The same McKinsey study found that women only hold 16 percent of executive positions in the U.S. and even less in the United Kingdom (12 percent) and only 6 percent in Brazil.