“The male, unless constituted in some respect contrary to nature, is by nature more expert at leading than the female”.
These words by the ancient Greek philosopher Aristotle may sound outdated, yet recent statistics on the number of women reaching senior levels in businesses tend to demonstrate a workplace still largely dominated by men.
Women currently hold only 5.4% of Fortune 500 CEO roles, whilst the overall percentage of women on boards in the United Kingdom is around 22%. These numbers are particularly surprising considering the numerous advantages of having more women in leadership roles and sitting at the boardroom table.
Not only is it easier to understand your customers if your organisation is representative of them in its leadership team, there is also plenty of hard evidence to support the business case for gender diversity in leadership. Studies have for instance highlighted a link between non-all male boards and steady financial performance. The accountancy firm Grant Thornton, for example, found that all-male boards underperformed mixed ones with a return on assets of almost 2% lower.
Lack of gender diversity at C-suite and board level could also have an impact on corporate reputation. In a highly competitive environment where more than 50% of market value comes from intangible assets, it is crucial for organisations not to overlook the drivers of a positive reputation. An academic study by Susan Bosco for example found that having a higher percentage of women on the board of directors was associated with corporates being listed on the "most ethical companies’ list".
Moreover, ignoring the opportunity to bridge the gender gap could make a difference in the war for talent. A company’s reputation as an employer could be affected making it more difficult to attract top talent -- both male and female – with multiple studies showing a clear connection between corporate reputation and ability to attract and retain the best people. Furthermore, less talented females may be likely to join your organisation as one of the key criteria associated with a strong employer brand is opportunity for career growth.
Besides these various benefits, it is worth noting that the political arena increasingly incentivises organisations to represent women in the top levels of business. For instance, an independent review led by Sir Philip Hampton and Dame Helen Alexander concluded companies listed on the FTSE 100 should have at least a third of their executive positions filled by women by 2020. It followed the work of Lord Davies who recommended in 2011 that FTSE 100 companies should bring the proportion of women in boardrooms up to 25% by 2015.
So how should organisations close the gender gap at its highest level?
The first step is to proactively include the topic of diversity in discussions regarding C-suite and board succession. Diversity should be questioned in its broader sense looking at the skills, work experiences, and behavioural attributes the board is currently missing.
Once the gaps have been assessed, it is necessary to set clear objectives, as well as a rigorous plan to address them. Finally, establish a culture of responsibility by measuring and tracking progress to ensure proper follow-up on board and governance reviews.
Ensuring gender equality in the C-suite and on the board is crucial but should not become yet another criteria of the compliance box-ticking exercise that governance has become. The increased pressure from activists and politicians should lead to a broader reflection on the current lack of diversity at senior corporate levels and the necessity to ensure more diversity, gender-wise, but also in terms of skillsets, at the boardroom table and in the C-suite.