Ultimately it’s about business performance… and the best companies in terms of performance will be those that truly embrace diversity [by] hiring, developing, and promoting women to key business leadership roles.~ Mary Fontaine
Women are transforming the face of business and society, moving into leadership roles as business owners and corporation executives. The business case for gender diversity is tangible and straightforward, and it is a platform that should resonate with all executives.
A study titled “The Bottom Line: Connecting Corporate Performance and Gender Diversity” by Catalyst, examined 353 Fortune 500 companies and proved the correlation between increased gender diversity at highest levels and improved financial performance. The findings assert that “the group of companies with the highest representation of women on their top management teams experienced better financial performance than the group of companies with the lowest women’s representation”, with a 35.1% higher ‘Return on Equity’ (ROE) and 34% higher ‘Total Return to Shareholders’ (TRS).
Another study reported in the Harvard Business Review; 215 Fortune 500 firms were evaluated for their support of women executives and respective profitability. The results of this survey demonstrated that Fortune 500 companies with a higher number of women executives outperformed the median firms in their industry. Other studies have found a correlation between gender diverse boards of directors, particularly boards with female directors, improved performance, including higher revenues.
Women currently earn more than one half of all bachelor’s and master’s degrees in the U.S. (57.3% and 58.5%, respectively), nearly one half of all doctorates and law degrees (44.9% and 47.3%, respectively), and comprise about one half of the U.S. paid labor force (46.5%). However, women are under-represented in business leadership throughout the U.S. Women hold only less than 20% of board seats for U.S. Fortune 500 companies.
Women are also under-represented in executive positions, representing less than 20% of Fortune 500 executives. These statistics suggest that although women are viewed as an important factor in an organization’s success, their limited advancement into executive and director roles indicates that barriers continue to exist.
In the report “Women and the Paradox of Power” by Dr. Anne Perschel and Jane Perdue write: Many women relate to power in ways that prevent them from attaining senior level positions, be it lack of confidence; cultural conditioning; or simply not understanding what power is. In comparison, interviews with women in senor business leadership roles at the highest levels of corporations, reveal that they have a different understanding of power and use different approaches to gain more of it.
They then use their power and influence to make important changes to culture and to leadership practices. Reshaping a male-dominated business culture, changing the ratio of women to men, and thereby improving bottom line results; requires a very specific set of actions by those currently in leadership positions, as well as by women themselves. The authors identify the key issues and solutions:
- Know power and be powerful: Sixty-one percent of survey participants hold mistaken views about how to advance their power (and themselves). The authors emphasize that women must study power, understand power, and use their power to change the culture of business.
- Ditch Cinderella: Over sixty percent of the participants preferred passive approaches to gaining power, opting to be granted access, rather than actively taking it. Women cannot passively wait on the business sidelines, hoping business culture will change and hand them the most powerful decision-making positions.
- Show up. Stand Up. Voice Up: Women comprising nearly forty-seven percent of the entire workforce, holding forty percent of all management jobs, and earning sixty-one percent of all master’s degrees, they are uniquely positioned to work together and with interested men to dismantle legacy organizational barriers and stereotypes.
- Forge strategic connections: Relationships are the currency of the workplace, yet sixty-seven percent of the women in this study are not taking charge of building their networks.
- Unstick their thinking: Thirty-eight percent of participants opted for being well-liked rather than powerful. The authors contend this is an area where some women need to re-order their preferences and adopt both.
In the report “Global Gender Gap Report” by ‘The World Economic Forum’ measured the performance of 134 countries on gender-equality by looking at gender disparities in access to resources and opportunity over-time along economic, political, education, and health-based indicators. Iceland, Norway, Finland and Sweden maintain top rankings closing over 80% of their gender gaps, and the U.S., Mali, Pakistan, Chad, and Yemen taking the lowest rankings with around 50% of their gender-gaps yet to close.
New quota requirements in Europe are placing more women at key leadership levels in European companies; reports ‘Corporate Women Directors International’ (CWDI), a non-profit research organization on women directors.
In its latest report, CWDI examines the gender-diversity on corporate boards of Fortune Global 200 Companies. In Europe; Norway, Spain, France, the Netherlands, Iceland, Italy and Belgium currently uphold government-issued quotas mandating the number of seats reserved for women on corporate boards. France and Italy are showing strong gains in women’s boardroom representation with women directors comprising 20.1% and 9.2% of seats on corporate boards, respectively.
In the article “Why Women Leaders Need Self-Confidence” by Leslie Pratch writes: I headed research at the University of Chicago investigating the longer-term personality predictors of leadership. Among the relationships examined were those among gender; coping and motivation, in the evaluation of leadership effectiveness. Among the particularly striking findings of this research were the differences between men and women on measures of active coping. In a nutshell, we took measures of; coping, motivation, and intelligence at the beginning of the study.
At the end of the study, we assessed the ability of these measures to predict leadership effectiveness as evaluated by peers, superiors, and subordinates. We found that the only measure that predicted leadership for men and women alike was an overall measure of active coping, which indicates the ability to respond adaptively to stress and to grow. Gender-based expectations for behavior, influence the styles and evaluations of leaders.
Women are expected to display high levels of social (communal) qualities, including; needs for affiliation, a tendency to be self-sacrificing, concern with others, spontaneity, and emotional expressiveness. Men are expected to display high levels of agentic qualities, those associated with acting or exerting power, including; independence, assertiveness, self-confidence, and instrumental competence.
The correlation between self-confidence and leadership effectiveness was also overwhelmingly statistically significant. As a whole, these findings indicate that women have to have high self-esteem and high self-confidence while leading in a communal style, in order to be perceived as effective leaders. In short, they must be stronger copers in order to transcend the constraints placed on their business leadership style.
In the article “As Leaders, Women Rule” by Rochelle Sharpe writes: New studies find that female managers outshine their male counterparts in almost every measure. That’s the essential finding of a growing number of comprehensive management studies conducted by consultants across the country for companies ranging from high-tech to manufacturing to consumer services. By and large, the studies show that women executives, when rated by their peers, underlings, and bosses score higher than their male counterparts on a wide variety of measures; from producing high-quality work to goal-setting to mentoring employees.
Using elaborate performance evaluations of executives, researchers found that women got higher ratings than men on almost every skill measured. Ironically, the researchers weren’t looking to ferret-out gender differences. They accidentally stumbled on the findings when they were compiling hundreds of routine performance evaluations and then analyzing the results. The gender differences were often small, and men sometimes earned higher marks in some critical areas, such as strategic ability and technical analysis.
But overall, female executives were judged more effective than their male counterparts. ”Women are scoring higher on almost everything we look at,” says Shirley Ross. Women think through decisions better than men, are more collaborative, and seek less personal glory; says the head of IBM’s Global Services Div., Douglas Elix.
Instead of being motivated by self-interest, women are more driven by ”what they can do for the company”, Elix says. Professor Rosabeth Moss Kanter, Harvard Business School, author of the 20-year-old management classic book, ‘Men and Women of the Corporation’, says; ”Women get high ratings on exactly those skills needed to succeed in the global Information Age, where teamwork and partnering are so important.”
The concept of business leadership is changing; however, there is a clear double standard: Studies show: ‘Male CEOs and senior vice-presidents got high marks from their bosses when they were forceful and assertive and lower scores if they were cooperative and empathic. The opposite was true for women: Female CEOs got downgraded for being assertive and got better scores when they were cooperative’. Concluding that at the highest levels, bosses are still evaluating people in the most stereotypical ways.
That means that even though women have proven their readiness to lead companies into the future, they’re not likely to get a shot until their bosses are ready to stop living in the past. But if women are so great, why aren’t more of them running big companies? According to ‘boomerdivanation.org’; there’s still a pipeline problem: Most women get stuck in jobs that involve human resources or public relations; posts that rarely lead to the top.
At the same time, female managers’ strengths have long been undervalued, and their contributions in the workplace have gone largely unnoticed and unrewarded. Companies are now saying they want the skills women typically bring to the job, but such rhetoric doesn’t always translate into reality. These under-currents of bias are forcing many women to seek other career opportunities, such as, starting their own businesses.
As of March 2011, there were 10.1 million businesses owned by women, making up 40% of all private businesses. Many women admit that because they spend so much time focusing on getting results, they don’t think enough about strategy and vision; qualities that Harvard’s Kanter says, are still the most important in a top executive. ”If women are seen as only glorified office facilitators but not as tough-minded risk-takers… they will be held back from the CEO jobs.” says Kanter,
In the end, it takes a lot more than competence to make it to the top. Getting the best performance evaluations in the company’s history may not be nearly enough. ”When you actually sit down in a selection committee to choose the CEO, lots of subtle assumptions come into play,” said Deborah Merrill Sands. Companies may say they want collaborative leaders, but they still hold deep-seated beliefs that top managers need to be heroic figures.
The bottom line is that the business case for diversity is strong. Companies with gender diverse leadership teams have seen the positive results and are outperforming those without women at the helm. The prospect for improved financial performance is a business case that cannot be ignored.
We knew we had to be twice as good, twice as reliable, and twice as tough-minded as the bright young men who surrounded us, and we worked like horses to prove our worth. ~Ellen Kaden