Women At The Helm: Can You Afford Inequality In Your Business?

Women are taking the reins in more and more companies worldwide. Not only are they the equal of their male colleagues, but a flurry of recent reports confirm what many business leaders already knew: having a more equal gender balance in the top levels of your company can actually increase performance.

2012 ranking of the 500 largest corporations in the United States includes a record 18 firms helmed by female CEOs, up from 12 companies in 2011. Fortune executive editor Stephanie Mehta said she expects the ratio to continue: “The good news is that while we have 18 today, there’s a pipeline of women coming into leadership positions that’s very, very deep and very, very wide,” Mehta said. “There are women sitting just below the CEO position at these Fortune 500 companies and many of them are poised to lead Fortune 500 companies when there are openings and movement.”

Despite the bleak economic outlook at the moment, women-owned firms have been doing disproportionately well: an American Express OPEN-commissioned report found that at the highest end of reported earnings (more than $10 million in annual revenues) the number of women-owned firms has grown by 56.6% since 2002—fully 47% higher than the 38.4% increase among all $10M+ firms regardless of gender.

It isn’t just in terms of growth that women are driving success; a report by the Credit Suisse Research Institute showed that ‘those firms dominated by men had recovered more slowly since the 2008 financial downturn than those with a more balanced male-female ratio.’ The same report stated thatcompanies perform better when they have women directors: shares of companies valued at more than $10 billion that had female board members outperformed comparable businesses with all-male boards by 26 percent worldwide over a period of six years.

Not only that, but companies with more equalized gender distribution had 30 percent better IPOs, and research cited in the Wall Street Journal shows that ‘firms with at least one woman director are significantly less likely to restate quarterly or annual earnings than are companies with an all-male slate of directors—40% less likely.’

What you can do to redress the balance:

Increasing the number of women in senior roles isn’t an overnight task. Here are some tips on supporting female colleagues wanting to rise to senior positions:

• Establish a mentoring system. Mentors can support an employee’s career path and help find solutions to problems they face. Reverse mentorship is especially valuable – sharing experiences and valuable lessons with the younger employee force is great, but it’s equally as critical for senior leaders to learn from young and technology-savvy employees to understand the latest digital and millennial-driven trends.
• Look at maternity and paternity leave allowances, as well as childcare arrangements and flexible working: supporting colleagues with families can remove barriers to women’s career advancement. It is very tough to find a job-sharing arrangements in most large companies, though an arrangement like that (especially immediately after a woman has a child) would ensure lower turnover rates and deeper employee loyalty.
• Role models can really inspire others: encourage women at higher levels to take an active role in promoting career development of others, speak at internal events, and share their stories.

But don’t just take my word for it. Here are opinions from several though-leaders.

Richard Branson: “If you are looking to increase the number of women in leadership positions at your company, you might start by considering what opportunities female employees have for career advancement, and what barriers they may be encountering. Ask women from every area of your company about their experiences and for their advice.”

In “She’s (Rarely) the Boss,” quoted in NY Times, Nicholas Kristof writes that female participation at Davos, Switzerland, the “annual conclave of the presumed powerful” is 17 percent… “Two things could help: more fathers taking on real equal roles in child-rearing, and more structural support, not for women, but for families. Families who need paid sick leave. Families who need paternity and maternity leave. Families who need access to affordable, high-quality day care, and to birth control, and to preventative health care.”

Sheryl Sandberg: “We need women at all levels, including the top, to change the dynamic, reshape the conversation, to make sure women’s voices are heard and heeded, not overlooked and ignored.”

Promoting women’s roles at the top levels of business is an ongoing mission, but the research shows that it is one that is essential to continue, not only for the benefit of women, but for the health of the economy in these tough times.

Originally posted in Forbes