Women Leaders Mean Good Business
As a professional woman, you can do more than feel good about helping your company attract and retain other women business leaders — especially at executive echelons. It turns out that this practice makes good business sense.
According to a McKinsey Quarterly article, A Business Case for Women: “Companies that hire and retain more women not only are doing the right thing but can also gain a competitive edge.” Turns out there is also a high correlation between a high number of female executives and strong financial performance.
Is Three a Charm?
Catalyst, a nonprofit organization that promotes inclusive workplaces, provides hard numbers to support the link between women executives and business performance. In a 2007 study, the organization found that Fortune 500 companies with three or more women on company boards gain a significant performance advantage over those with the fewest women on boards:
- +73 percent return on sales.
- +83 percent return on equity.
- +112 percent return on invested capital.
Helping Professional Women Succeed
In another informative article, McKinsey Quarterly interviews Beth Axelrod, the head of human resources at eBay, on how to better hire, retain and promote women. Here are some highlights:
Institute senior leadership. “You can always benefit from some grassroots efforts, but as with many things, in the absence of leadership conviction and visible action, you just don’t get traction,” Axelrod said in the article.
Provide women with advocacy and support. “Women are looking for a network of other women — to have people to share experiences with, to solve problems with, to look to as role models or examples of success, and to learn from.”
Fair people systems and processes. Certainly, Axelrod noted, assessments, promotions and job placements must be fair. But it is often the subtleties of style differences that are missed. For example: “Ensure that the tendency for women to not raise their hands for jobs doesn’t get interpreted as lack of ambition,” she said.
Provide flexible work options. The trick here, Axelrod said, is not just creating a flexible work policy. What’s needed is assurance — perceived permission — that it’s OK to take advantage of flexible work options. “People follow the cultural norms and what they believe the leadership wants, and cultural norms and informal aspects of organization trump policy every single day.”
Women Leaders Today
“Companies are still lagging in appointing women to board seats and very few women hold executive officer positions,” said Catalyst in a recent press release.
Catalyst’s latest research of the Fortune 500 shows:
- Women held 15.2 percent of board seats, a number that reflects little growth over the past five years.
- Almost 90 percent of companies had at least one woman director, but less than 20 percent had three or more women serving together.
- Women’s share of board chair positions remained flat at 2 percent.
“The time is up for ‘give it time,’ ” said Ilene H. Lang, president and chief executive officer of Catalyst.
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