Why focus on female leaders? Because there is a correlation between the number of women in senior management positions and improved corporate performance, and yet just four percent of CEOs of U.S. companies are women. Multiple studies conducted by Catalyst have established an empirical link between gender diversity in corporate leadership and financial performance, most recently finding that Fortune 500 companies with high percentages of female officers had a 35% higher return on equity and a 34% higher total return than companies with fewer women executives.
McKinsey & Company noted in a 2012 study, part of its Women Matter research, that "companies benefit from the different but complementary leadership styles that women bring to their work, to the extent that there is a link between the proportion of women in senior management positions and corporate performance."
What does the gender balance in your organization's leadership look like? If there's a glaring lack of gender diversity, chances are pretty good that your company's leadership is neither reflective of its workforce or its customers and isn't performing overall as well as it could. Clearly, corporations that are slow to develop and leverage their pools of talented female employees are placing themselves at a distinct disadvantage in terms of growth, profitability and competitiveness now and in the future.
The Global Perspective
Progress is dismally slow in the numbers of women being elevated to senior management positions in most parts of the world: women account for just 17% of seats on corporate boards and 10% of executive committees in Europe. In the U.S., women account for 15% of seats on corporate boards and 14% of executive committees according to McKinsey & Company. Recent steps forward seem to be fueled largely by concern about worsening talent shortages in some regions, especially in Asia, where corporations have been very slow in opening the C-suite to women.
The New York Times reported last month that Asian universities are beginning to follow the lead of business schools such as Harvard and Stanford in offering specialized programs to develop female business leaders--the University of Hong Kong launched a program designed to prepare Asian women for the boardroom this past April. Similar initiatives and special courses for female executives are offered at the Indian Institute of Management Bangalore, Peking University, and the National University of Singapore. The Times quoted Dr. Vivian Lim, director of the National University of Singapore's Women in Leadership program, who noted that the growth of such programs in Asia is in response to challenges presented by critical talent shortages in the region: "Organizations have come to realize that women provide a ready pool of talent and [that] more can be done to harness this reserve of [talent]," Lim said.
Addressing gender imbalance should be a factor in building and enhancing a strong employer brand. And while there are many steps organizations can take to move things in the right direction, none will be effective without the support and leadership of the CEO, who must model proactive behavior by promoting or recruiting more women into senior positions and holding senior leaders accountable for diversity and inclusion goals centered on helping women reach their full potential. Other recommendations:
- Consider partnering with high schools and colleges to develop mentoring programs that pair female executives with young women interested in a career in business. Such programs might include events and activities such as a day of job shadowing and company tours.
- Start a sponsorship program that pairs high-potential female employees with executives who will act as their advocates and help to raise their profiles in the organization.
- Tap into external advisors to coach senior leaders on diversity and inclusion efforts.
- Involve female leaders in recruitment efforts and internal branding and emphasize work/life balance benefits such as schedule flexibility, job rotation programs, customized learning and development plans, and career customization.
Lorrie Lykins is i4cp's managing editor and director of research services and author of Stories from the She Suite™.