Originally published by Mark Weinberger on LinkedIn: What can you do to close the gender gap in your workplace?
If you could make one change in your organization today, what would it be? What if I told you there was a step you could take to increase profit margins, raise your team’s collective intelligence and create a more innovative, fair and equal workplace?
What’s the secret? Help more women get the experience and opportunities they need to reach leadership roles.
In partnership with the Peterson Institute for International Economics, EY recently undertook a comprehensive study of gender inequality in corporate leadership. The sample size was both massive and global, surveying nearly 22,000 organizations across a wide variety of industries in 91 countries.
Among all these different organizations, the results came through clearly and consistently: a firm with female leaders will outperform a firm with none. In fact, if 30% of a company’s leaders are women, its net margin will be six percentage points higher than a firm with no women in their executive ranks. The analysis finds a smaller effect when focusing on profitable firms, where the firm with greater gender balance has a profit margin that is one percentage point higher. But for most firms, even the smaller figure is substantial. To put that number in context, that kind of stark increase would increase profit by 15% for the typical profitable firm.
And the benefits don’t stop there. An analysis of the S&P Composite 1500, for instance, has shown that companies with women in top leadership positions have an “increase in innovation intensity”. Other research has shown that teams with more women are better at logical thinking, coordination, planning, problem solving – and have a higher collective intelligence overall. It should come as no surprise, then, that tech companies led by women tend to produce higher revenues and returns on investment than firms led solely by men.
Given the myriad benefits for business, it’s almost economic malpractice not to create a culture and talent pipeline that can meaningfully increase executive gender parity. Indeed, it’s hard to think of any other initiative with so much potential that business leaders would not pursue.
So in this case, have savvy business leaders capitalized on this opportunity?
For the most part, they have not.
Our research may have uncovered clear benefits that come from gender equity in business, but it also revealed a disappointing truth: women are still vastly underrepresented among top leadership in business. Globally, nearly one in three companies have absolutely no women in C-suite positions or on their board. Half of all global companies don’t have a single female top executive.