International Women’s Day, which falls in early March, has been and gone. But it’s just one day out of 365, whereas having more women in the boardroom could be making a huge improvement to your business throughout the year.
Growing number of gender diverse boards
There are countless studies which demonstrate the value of women’s leadership when it comes to business success. Possibly as a result, the number of gender diverse boards is increasing. The Australian Institute of Company Directors says that women occupy 34.2% of board seats in ASX 200 companies (in fact, there are no longer any all-male ASX-200 boards) and that for each of the last four years businesswomen have accounted for between 40% and 45% of new board appointments.
No statutory mandates
A recent report from the University of Queensland Business School – Towards Board Gender Parity – reveals that Australia has become one of only three countries (the other two being the UK and Canada) to have attained 30% female representation on top-listed company boards without the benefit of legislated quotas.
Five ways women add value to boards
Top Australian companies appear to have discovered for themselves that having women in senior leadership roles leads to greater potential business success. So, just how does women’s leadership bring value to the boardroom?
1. Customer satisfaction
According to research by global market statistics group World Data Lab (cited by Catalyst, an activist on women in the workplace), women in 2019 were responsible for US$32 trillion of consumer spending globally, including US$301 billion in Australia.
Data and analytics group Nielsen found that 89% of women worldwide still have shared or primary responsibility for daily consumer purchases. Since women drive most of the consumer purchase decisions, it follows that having women on boards makes sense. If a company’s customers are under-represented at board level, customer satisfaction could suffer, affecting overall performance.
2. Talent retention
Once again, studies have proved that having women in senior leadership positions has a positive effect on employee retention. When women at all levels of an organisation observe that there are female members on the board, they are more likely to experience job satisfaction and engagement, and be motivated to advance their own careers. This leads to improved results in attracting female talent and a reduction in employee turnover. Interestingly, it’s overall turnover that improves, suggesting that most men, too, feel better about a company that values the contribution of women.
Although gender diversity is just one of many possible kinds of leadership diversity, it’s an important one since women represent 50% of the population. Women bring a different range of experiences and perspectives to the boardroom table. This helps to avoid the ‘groupthink’ that is possible in an exclusively male board with members from very similar backgrounds.
An article in the Harvard Business Review cites research showing that female directors are more likely to probe deeply into issues, ask more questions, and seek the opinions of others. What’s more, there is a statistically proven relationship between leadership diversity and innovation, resulting in greater revenue from new products and services.
4. Improved ESG performance
Women’s leadership at board level doesn’t merely contribute to the bottom line. The Harvard Law School found that it can boost Environmental, Social and Governance (ESG) performance as well, enhancing the firm’s reputation as well as reducing the likelihood of financial misconduct. Women are more likely to align with social issues like climate change, sustainability, work/life balance and human rights, acknowledging that the concerns and requirements of a range of stakeholders are crucial to corporate strategy.
5. Enhanced company culture
Company culture starts at the top. Gender diversity at the board level can transform the culture of the board and also filter down through the whole organisation. As a result, the entire workplace becomes more inclusive, maximising productivity and making full use of available talent, while promoting a varied range of decision-making techniques and leading to greater business success.
Strengthen your own team
Gender diversity is only one of the ways in which you can strengthen your leadership team, but trying to extend the message of International Women’s Day to the entire year is a good place to start.
If you would like some advice on improving the leadership potential of your business, contact us today to be put in touch with our Business Advisory team for a no-obligation chat. We can help you get where you want to be.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.