The Economic Empowerment of Women Is a Business Issue

By: Adele Gulfo via Huffington Post
02/05/2013

I am often asked for my thoughts regarding why women are not joining corporate boards at a faster rate, and what corporations can do about it. While most people still see the economic empowerment of women as an equality issue, I see it for what it really is: a business issue.

According to a recent paper by Deloitte, economic studies show that corporations with women on boards and in senior leadership positions have a higher return on equity. In Europe, these returns have been estimated at more than 10 percent higher. There’s a business case to be made for the results women bring to the table — but to really see more women in leadership positions, we need CEOs and business leaders to understand that greater diversity at the most senior levels of business will help them gain a competitive advantage.

Why? Because diversity allows for better decision-making and less group-think. Diverse teams also produce more innovative solutions and products, deal more effectively with risk, and better relate with their customer base. Remember that almost 80 percent of consumer decisions are influenced by women. Up to this point, the conversation on this topic has largely been about fairness and goodwill. That needs to change. We must better articulate the superior business results that flow from leadership diversity if we are to generate a greater impetus for change.

Many countries have tried using quotas to get more women to hold board seats. This has worked in Norway, where over 40 percent female representation has been achieved. But, this tactic will not solve the underlying challenges we face in corporate America, and does nothing to ensure that there is an increasing pool of qualified women with relevant experience to serve on boards.

Before we see a trend-break in the percentage of women in the boardroom, we need to solve the “leaky pipeline” that diminishes the potential talent pool, especially in operational (P&L) roles, which are often required for director positions. Women enter the workforce in similar percentages as men in the U.S., but the percentage of women who advance to manager and director levels drops off drastically compared to male counterparts. A new report from Catalyst entitled “Good Intentions, Imperfect Execution? Women Get Fewer of the ‘Hot Jobs’ Needed to Advance,” foundthat women often get fewer opportunities to run larger, more visible projects, and miss out on mission critical roles and international experiences that are critical to advancement. Read full article>>