How To Increase Profits Through Gender-Balanced Leadership
"While the global population is largely gender balanced, men hold eighty-five percent of senior leadership positions in public companies," states Melissa Greenwell, author of the new book, Money on the Table: How to Increase Profits Through Gender-balanced Leadership.
Furthermore, Greenwell shares that at the current rate of change, most readers of her book this year will be dead before gender balance hits fifty percent.
And, the fact of the matter is, explains Greenwell, "Hardwiring in the brain is different for men and women. The physical differences are associated with natural tendencies in thinking, communicating, and problem-solving that are all needed in business. Men and women demonstrate these traits in varying degrees. Successful organizations have leaders who exhibit the characteristics of both genders."
"You are leaving money on the table and forfeiting your strategic advantage if you don't have women well represented on your boards and seniors management teams," argues Greenwell.
For those organizations who have gender-balanced boards, data is striking:
- Since 2005, publicly traded companies with more than one women on their boards have seen stock market returns of a compound 3.7 percent a year higher than those with no female representation.
- Firms with a higher proportion of women on the board have higher valuations, better returns on equity, and higher payout ratios.
- In every sector, form telecommunications to utilities, companies with no gender balance on the board have lower-than-average market capitalization; those with three or more female board members exceed the average.
Citing evidence from Greenwells' book, a more gender-balanced board will see these benefits to the board's culture and behaviors:
- Enhanced dialogue
- Greater collaboration
- Better decision-making, including the value of dissent
- More effective risk mitigation and crisis management, with better balance between risk-welcoming and risk-aversion behavior
- Higher quality monitoring of and guidance to management
- More orderly and systematic board work
So, what do you do as a leader? Greenwell says, "Defy the norm. Throw out old policies and practices that get in the way of attracting and retaining women. If you want the best talent, you have to compete with organizations that already get it."
She adds, "Although the issue is one of diversity, it's different and must be specifically addressed."
Here are 10 steps to take for attaining greater gender balance:
- Don't accept that there aren't enough female candidates for your senior leadership roles.
- Increase your pipeline of female talent across the organization.
- Take more risks on your female employees. Take a second look at those who aren't raising a hand but need to be called upon. High-potential women often operate under the radar.
- Create an employment brand that attracts more females and retains the ones you've got.
- Keep your female talent. Do your practices and programs support women?
- Mentor your high-potential females. An effective mentoring program demands structure.
- Identify and communicate criteria for successful leadership.
- Establish a succession plan.
- Measure progress. Set goals for gender balance in your organization.
- Communicate all the above, clearly and often.
And, if you are a woman in a organization, Greenwells advocates that you:
- Speak first, not last. Be aware of any tendency to not speak up.
- Stop apologizing. Don't qualify your statements.
- Choose a mentor. Don't ask for one, pick one. Choose someone who is really good at something you want to be good at.
- Make time for face-to-face communication.
- Think about what you want to do next and make sure that people in control of those decisions are aware of your aims.
Money On The Table draws from the latest research and in-depth interviews with CEOs and other senior leaders.
Thank you to the book's publisher for sending me an advance copy of the book.