Gender-diverse leadership is good for the bottom line

Study finds that companies with more female leaders perform better than those with less.

With today being International Women’s Day, there can be a tendency to focus on the marginalisation of women socially, economically and politically. But why not focus on the positives instead? The Global Leadership Forecast finds that diversity – particularly among genders – increases a business’s bottom line. This is according to a new study from DDI, The Conference Board, and EY, which looked at demographic data from over 2,400 organisations in 54 countries.

The research reveals that companies that have reached an above-average level of gender diversity overall (at least 30 percent) and at the senior-level (more than 20 percent) outperform diversity laggards in key leadership and business outcomes. Specifically, it states that companies with women holding at least 30 percent of leadership roles are 1.4 times more likely to have sustained, profitable growth, and are 1.7 times more likely to have greater leadership strength. 

One of the reasons the gender diverse organisations perform better is that they attract better talent as a diverse workforce is a sign of an attractive work environment. At the senior level, diversity is a sign of an inclusive culture that views multiple and diverse perspectives as being critical to achieving success. Because there is a stronger balance of views, the leadership strategy does not focus on meeting the needs or any single demographic over another, whether it is with regard to employee and customer satisfaction.

As such, the study finds that leaders from more gender-diverse companies were twice as likely as their low-diversity counterparts to report that their leaders work together to create new solutions and opportunities, and that multiple perspectives determine success. They also reported a higher level of collaboration across organisational boundaries with leaders from more gender-diverse organisations were 1.5 times more likely to break down silos and create synergies in their efforts to achieve success. 

That said, there still seems to be a reluctance to advance women in the workplace. According to the 2018 Grant Thornton International Business Report, women still lag behind their male counterparts in business. It shows that although almost one third of senior roles in South Africa are now filled by women, one in five local businesses still have no women in senior positions.