Companies too often have the attitude that one woman on a board or in a position of seniority is enough. It's time to end that fallacy.
Women CEOs of large firms are a rare breed. In the U.S. in 2015, there were more CEOs called John running big companies than women. In 2016, there were only six female CEOs in the firms covered by the FTSE 100 index and 12 in the FTSE 250 index. In the FTSE 100, there were only four women chairs, 185 women on the executive committee out of 991 positions and 283 board members out of 1,065 positions.
“Greater diversity brings new perspectives on markets and improved problem-solving skills. ”
For example, I recently published a report with Jenny Phillimore, Jane Glover and Yanan Zhang, which shows that in 2017 women made up only 13.1 percent of the directors of corporate boards in the largest West Midlands professional services companies and the public sector. More than half of the companies (nearly 56 percent) have male-only boards, whereas two companies have female-only boards.
This is despite the fact that West Midlands public companies have on average a higher proportion of women on their boards and in CEO positions than private companies – roughly 16 percent compared to 13 percent. But this still lags behind the U.K. average for both the FTSE 100 (28 percent) and FTSE 250 (23 percent).
The level of inequality reflected in these figures offends most people’s sense of justice and questions the effectiveness of support for equal opportunities. This may be a sufficient reason to try and boost the number of female CEOs. But there is also an economic incentive for having more women in top positions.
Much research shows that greater board and leadership diversity has big benefits for companies. Much of this stems from widening the communication and networking skills, as well as leadership styles.
“Gender diversity is a proven asset for brand image, customers, shareholders and employee satisfaction.”
It is also shown to increase firm innovation through a diverse board’s ability to respond more creatively to changes in global markets and customer needs – women are now involved in 80 percent of consumer goods purchased, and by 2025 women are predicted to account for 60 percent of all personal wealth.
One study found that companies in the top quartile for gender and ethnic diversity are 35 percent more likely to have financial returns above the industry average. This is because gender diversity was a proven asset in relation to brand image, customers, shareholders and employee satisfaction.
Widening the talent pool
The lack of women in top positions also indicates that firms could do much more to develop unused talent. This talent pool would likely include more collaborative and supportive “female management styles,” which research shows are more prevalent among female leaders and are both underused and beneficial.
“More women are needed at every level of leadership in a company.”
These are powerful tools for building bridges into leadership. They are both effective at unlocking potential within businesses as they create space for reflection, connection, critical insight and knowledge exchange. As a business benefit, mentoring is also crucial for more engaged and motivated employees.
The presence of more women CEOs in some organizations is an indicator that private and public companies are implementing policies and practices that promote gender diversity at all leadership levels.
One is not enough
Companies too often have the attitude that one woman on a board or in a position of seniority is enough. But the world needs more women at every level of leadership in a company.
There is also evidence of a link between more women at a senior leadership level and better female representation at the level immediately below. This is likely more than just positive role models giving confidence and encouragement to women aiming to advance their careers.
It could also be a consequence of better staff development policies, which address diversity and provide mentoring, coaching and other support.
This leads to better representation of women more widely across the business. Not only does this make things more equal, it brings with it economic and social benefits.
This article first appeared on The Conversation and was republished with permission.
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