According to a recent study, firms with female leaders perform better. The Credit Suisse Research Institute measured the share price performance of 2360 companies globally over the past six years. Their research concluded that it would on average have been better to have invested in companies with women on their management board.
Overall results showed that companies with at least one female on their board produced a 16% return, 4% higher than companies with no female board member.
Lord Davies’ report of Feb 2011, set the FTSE 100 companies a voluntary target to double the percentage of women on their boards to 25 % by 2015. In March 2012 there were 11 companies in the FTSE 100 which still had all male boards. Across all three FTSE indices, only one in 18 executive directors is female. The best performing sectors on gender balance at board level have been Retail, Technology & Media, and Health. All male boards are most prevalent within the Industrial sector.
Diversity today should be on the agenda of management and board meetings
Vikram Chhacchi, executive vice president of DHR international, a Chicago based firm says the “career progression of women is no longer just an HR responsibility, it is now a CEO function. Companies are putting diversity as a key result area for CEO and other business leaders”.
Neil Holmes of Norman Broadbent’s board practice said: “We are finding that women are appearing on shortlists, but the supply on the executive side is still lower than it should be and this requires companies to invest in long term cultural changes.”
So how do companies make the most of the diverse resources available to them to give them a strategic advantage?
Women in business have many differing demands on their time in today’s hectic world and may after reading this research feel that they are being stretched in many directions with many conflicts. Women need to be able to take the time out to reflect on what constitutes success for them and for some they will be happy with their short/long term career goals which are not to be a leader. Others will want to be groomed into a leadership role and for them it is important to be able to bring their strengths to the table and have their opinions listened to.
Companies need to give women appropriate training and mentoring to enable them to explore their own personal leadership style, understand how they are perceived by others and ultimately support them to get the right leadership role for them.
Organisations who are ready to make this cultural change and invest in their female leaders and managers should seek advice and guidance from development experts to prepare a programme of interventions specifically designed for high potential female leaders and managers that’s tailored to individual organisation’s needs.
There are many women with the depth and breadth of experience to compete with their male counterparts for positions on executive boards but it is important for organisations to appoint executives based on quality and merit and not to simply meet their quota of female members. After all women will perform better and contribute the growth of the organisation if they are recognised as adding value rather than meeting quotas.