Stanton Chase uses cookies to ensure you get the best experience on our website. Learn More
I disagree | I accept

Women in leadership: Why gender diversity is a strategic investment

September 2018
Share LinkedIn Share E-mail
Women in leadership: Why gender diversity is a strategic investment Cover Image

Looking at gender diversity from a business perspective

Gender diversity is a reality, but gender inclusion is a choice – one that must be made by individuals currently in leadership roles. Leaders have both a moral and a strategic responsibility to promote gender diversity among executive and board positions.

Diversity of life experiences brings strategic value to an organization

Pinpointing causality between gender and business performance is difficult because there are so many other contributing factors. An individual’s ability to succeed in business is impacted by their self-esteem, the opportunities available to them, and society’s expectations of their behavior.

Given this, it is important to remember that each individual does not necessarily conform to any or all of the necessary generalizations that result from studying gender’s impact on the world of business. Nevertheless, the body of research around this topic makes it clear diversity in corporate leadership is a more effective strategy than homogeneous leadership.

A Gallup poll of 800 businesses found gender-diverse teams benefit from the unique viewpoints, ideas and market insights of women and men.

Leadership diversity has a direct impact on brand perception

From a branding and perception standpoint, gender diversity is a strategic investment. Diverse leadership teams are better able to understand their customers, and to act on those insights.

To understand this issue, the Gender Forward Pioneer Index reviewed gender amongst the Global Fortune 500 and the World’s Most Admired Companies list. In total, the organizations represent 8,600 executives in 36 countries. GFP discovered that only 11 percent of senior leaders were female and no company had an equal representation of genders. Furthermore, 38 percent of companies had all-male senior leadership teams.

Those companies featured on the Most Admired Companies list averaged 17 percent female leadership, compared to 8 percent at other surveyed companies. Being admired in the public eye is far more than an ego boost; it directly benefits the bottom line as well as the organization’s ability to attract top talent.

Mentorship today will lead to diversity in the future

An organization’s employer brand is heavily influenced by the leaders who make hiring decisions. According to Herminia Ibarra, Professor of Leadership and Learning at Insead Business School, women and men network differently. In Ibarra’s experience, men tend to look for opportunities to network upward, while women tend to network with other women. However, Ibarra was quick to note that, as there aren’t many women in senior leadership roles, lateral networking becomes a self-fulfilling prophecy.

Weber Shandwick’s Chief Reputation Strategist, Leslie Gaines-Ross, speaking with Forbes magazine, noted brand reputation has a direct connection to talent acquisition.

“Job seekers want to see faces that look like theirs in management. Younger workers will want to work in a diverse environment and expect it,” said Gaines-Ross.

Fostering support for entry and mid-level female employees will ensure a robust internal pipeline from which draw talented, experienced professionals as new positions open up.

The strategic impact of gender diversity benefits the bottom line

When women are included in leadership roles, companies profit. In fact, a 2017 McKinsey study discovered that companies in the top quartile for gender diversity were 21 percent more likely to financially outperform their homogenous competitors.

This data corroborates the findings of researchers from the Peterson Institute for International Economics. The researchers discovered that increasing female leadership representation from 0 to 30 percent had a positive impact of 1 percent increase in net margin and a 15 percent increase in profitability.

To support and promote gender diversity on boards, Stanton Chase has partnered with the 30% Club, an international organization that aims to redress gender inequality by achieving a minimum level of 30 percent women members on FTSE-100 listed boards.

To learn more about how to foster the benefits of diversity at your company, contact the experts at Stanton Chase today.

Contact a Stanton Chase office near you

Find an office