To recognize International Women’s Day, we’re sharing our favorite facts that demonstrate how gender diversity in companies leads to improved business gains, more innovation, stronger CSR performance and more!
At Shortlist, we’re passionate about learning how diversity and inclusion help supercharge unlocking professional potential. This International Women’s Day, we wanted to share some of our favorite facts about how gender diversity in companies leads to better outcomes — not just for businesses, but for society. Be sure to share your favorite facts today with the hashtag #IWD2019and #BalanceforBetter.
#1: Companies with women on boards and top management trump all-male leadership
According to a 2015 study by the University of California Davis, companies that have more than one woman in the top management performed “considerably better than ones with mostly male boards and executives.” Moreover, a collaborative report by McKinsey and the Women’s Forum For The Economy And Society claimed, “companies where women are most strongly represented at board or top-management level are also the companies that perform best.”
#2: Gender diversity is good for the bottom line, likely due to increased innovation
A McKinsey report suggests that organizations in the highest quartile for gender diversity are 15% more likely to experience financial gains above their respective nation’s industry medians. Another study suggests that a rise in revenue can be attributed to the increase in the innovation of product and services, which is 38% more likely in companies with diverse management. In other words, diverse management teams are usually more innovative and earn a premium on their innovation.
#3: Women contribute to decreased fraud, corruption and mistakes
Greater inclusion of women in corporates has reportedly led to a reduction in controversial business practices — namely fraud, corruption, bribery and shareholder battles. Moreover, a gender diverse board has also been associated with fewer financial reporting mistakes, better collection and transparent disclosure of stock price information.
#4: Stronger CSR performance
Boardroom diversity has been strongly linked to improved performance in the realm of Corporate Social Responsibility (CSR). According to a recent study, board members from diverse experience and backgrounds tend to recognize the interest and needs of different groups in society. More specifically, gender-diverse corporate boards are likely to achieve high ratings in CSR initiatives. Additionally, a collaborative study of Fortune 500 boardrooms by the Catalyst and Harvard Business School claims that organizations with gender-inclusive teams, on average, contributed more towards charitable funds than companies without gender-inclusive teams.
#5: The benefits extend beyond companies
According to a recent study by the International Labour Organisation (ILO), the ever-increasing entry of women into the labor market has aided global growth and competitiveness. Moreover, the same study found that businesses are increasingly pinning gender equality as an important factor for long-term economic growth and development.
Despite these facts, we have a long way to go
While a gender-diverse workforce comes with a myriad of benefits, unfortunately, we have a long way to go. In 2017, only 5% of Fortune 500 companies had women CEOs, and sadly, a recent article by Grant Thornton showed that women actually hold fewer senior roles across the world in 2018 compared to 2017. Moreover, the World Economic Forum estimated the economic gender gap would take 217 years to come to a close.
And here’s how employers can play their part in closing this harmful gap. Research by the Boston Consulting Group showed: “Women do not consider recruitment to be the main challenge — only 26% cited this as an obstacle. It’s as seniority rises that the number of women declines steadily, and more women cited retention (36%) and advancement (45%) as the key issues. In other words, the challenge is not ensuring that women can get in the front door; it’s ensuring that they can climb the organizational ladder.”
This International Women’s Day, let’s examine how companies can do more to support women not just get in the door but rise to the top.