Organizations that don’t prioritize developing their female leaders are missing the boat, and missing out on greater profits.
According to the Peterson Institute for International Economics, while women make up a considerable share of MBA graduates and managers, few can be found as board members or in the C-suite. In a survey of about 22,000 firms around the world, almost 60 percent had no female board members in 2014, little more than half didn’t have any women in executive-level positions, and less than 5 percent of the firms had a CEO.
While researchers found that female CEOs neither outperform nor underperform their male counterparts, their study revealed that going from no women represented in corporate leadership—CEO, board or other C-suite roles—to a 30 percent share of women in leadership, was associated with a 15 percent increase in profitability for the average enterprise.
Researchers attributed the boost to at least two things:
- Increased skill diversity within top management increases effectiveness in monitoring staff performance, and
- Less gender discrimination through management ranks impacts talent recruitment, retention and promotion.