Research findings have, over the years, shown that an increase of women in leadership roles might be good for business. Even with findings, very few women make up the top echelons of power in most businesses as well as public companies.
According to the UC Davis Study of California Women Business Leaders study, carried out on companies in California, U.S.A, indicates that businesses with at least some women in high positions were doing extremely well compared to those with none. According to the study, 25 firms with the highest percentage of women in leadership roles delivered at least, 74% higher returns, than other companies.”
Women and success in business
The longer it takes to absorb more women into high positions, the longer it will take to bridge gender gaps. In return, businesses will continue to lose out given the number of skills as well as experience that most women bring to the table. A research report published by the McKinsey Global Institute indicates that the world could add as much as $12 trillion in the annual gross domestic product on women assuming more leadership roles.
Public companies are yet to reach the threshold of parity when it comes to gender equality in management roles. Men continue to call the shorts as evidenced in some of the biggest companies in the world. This is despite findings showing that a high percentage of women in high positions could translate to excess returns for shareholders.
Need to invest in women
A study conducted by Nordea indicated that corporate companies run by women tend to perform better than the overall market. The study showed that companies with a woman Chief Executive Officer or Chairperson of the board delivered annualized returns of up to 25%, more than double the 11% delivered by MSCI World Index since 2009.
“If you invested in a company with a woman at the helm, you would have outperformed the market,” commented Robert Næss, the portfolio manager at Nordau who designed the study, in a release. “Other studies have also shown that diversity is a positive factor, but not that many have also looked at CEOs or such a large number of companies.”
One of the key barriers to women occupying top positions in management has to do with cultural issues. The perception that women main role is raising kids and not running a business, continue to influence many employers decisions.
Until there is a dramatic shift in traditions as well recognition of women in leadership, many businesses might continue to lag behind.