The last few years have seen a big push for greater inclusion, gender balance and diversity in the corporate world. Despite the fact that women make up over half of the population, they are still woefully underrepresented at nearly every level of leadership in the workplace. This sad fact remains true despite the growing interest in increasing the number of women in leadership roles.
Increasing Gender Balance is About More Than Just Fairness
According to the 2015 Women in the Workplace Report, 74% of CEOs are committed to increasing gender balance, but at the current rate, it will take over 100 years to achieve gender balance in the C-suite. Most efforts to increase female leadership focus on concepts such as the need for fairness and a level playing field, making the case that increasing the number of women in leadership roles is a moral issue.
When fighting for greater inclusion, the case is also frequently made that organisations can increase their connection and engagement with the public, by simply increasing their number of female leaders. Since women make up more than half of the population, it stands to reason that governments, businesses and other institutions will naturally be more responsive to the needs of the public as more women assume leadership roles. After all, who has more insight into what products and services women want and need than women themselves?
Female Leadership Leads to Greater Profits
While equality and inclusion are valid arguments for why our society needs more women leaders, one of the best reasons to fight for gender parity in organisations is often overlooked. Increasing gender balance makes good business sense!
A growing body of research indicates that profits dramatically increase as more women assume leadership roles at the C-suite level. The latest study in this field is the report entitled Is Gender Diversity Profitable? Conducted by the Peterson Institute for International Economics (PIIE), this global survey from across 91 countries investigated the relationship between profitability and gender diversity at nearly 22,000 publicly traded companies.
While researchers have long suspected that having a greater number of female leaders in senior management increases profits, the results of this study were staggering. The results of the study show that companies with a high number of female leaders in the C-suite experience an average of a 6% higher profit margin than companies who have few to zero women in the executive suite.
Given the fact that the study found that nearly 30% of all companies have zero women in top leadership roles, and the fact that many organisations are still struggling to survive the global financial meltdown that began in 2008, one has to wonder what the financial impact on the worldwide economy would be if there were more women CEOs, CFOs and COOs. Could the answer to restoring growth and increasing financial stability for both companies and countries across the globe be as simple as enacting policies that make it easier for more women to assume leadership roles?
As the body of evidence that supports the need for more female leaders grows, organisations that wish to survive and thrive in a changing and challenging economy should ask themselves two questions.
- Can we really afford to not actively work to increase the number of women that we have in the C-suite?
- What can I do, today, to make gender balance a reality in my organisation?
Want to learn more about how to create more opportunities for women to become leaders? Need help to refine your skills so that you can take your leadership to the next level? Get in touch and contact us today to learn more about how we can help you to lead change at your organisation.