Is It Time For A SHE-FO?
Women in leadership position impact the bottom line.
Posted Apr 25, 2018
Women in leadership position impact the bottom line. Companies with boards that include at least three women with sustained representation on the board outperform those with no women board directors with sixty six percent higher returns on invested capital, fifty three percent higher returns on equity, and forty two percent higher returns on sales. In a new research study, Women Wanted: How a Renewed Focus on Culture Can Break the Diversity Stalemate, PA Consulting Group analyzed the performance and workplace equality of 50 leading organizations to determine what the relationship is between high-performance cultures, the number of women executive teams, and the gender diversity challenge. The research team focused on identifying if high-performance cultures and gender diversity are mutually exclusive.
The results corroborate many of the findings of corporate gender diversity studies conducted in the last twenty years. The three primary findings from the PA Consulting Group reveal that:
- A high-performance culture is more likely to exist in a company when there is gender diversity at the most senior level.
- Organizations with the strongest cultural and financial performance also have the highest proportion of women on their executive boards.
- High-performance cultures could be the key to creating conditions for women to be more willing and able to rise to the top in companies.
The research found that there is a very clear relationship between organizations with strong financial performance, a higher percentage of women in executive leadership teams, and a high-performance culture. The report authors write:
“The organizations with the strongest performance (measured by both cultural and financial indicators) also have the highest proportion of women on their executive leadership teams. In fact, the organization that came out on top in both performance and culture had the greatest proportion of women (50%) on their executive leadership team. This organization was found to perform best at communicating their core values, strategic direction, and organization goals over and above the other culture criteria. Noticeably, there were only two organizations without any women on their executive leadership teams. Interestingly, these two firms sat in the bottom five positions of both the culture and performance measures.”