There are many valid reasons for increasing the number of women at board level. There is, of course, the overriding and fundamental principle of equality in the work place. Diversity shows that an organisation is interested in providing the same opportunities for all of its staff. But there is a compelling argument for levelling the professional playing field – one that is often overlooked – a sound business case.
The business argument for equality between the sexes starts in the school playground. More specifically, it begins in the GCSE exam hall, where girls are vastly outperforming boys. In fact, news outlets recently reported that this year’s GCSE results indicated that there is a gap between the sexes of 6.7 percentage points, the highest on record.
Girls are achieving better results in almost every subject and by many accounts go on to do so at higher levels of education. It therefore seems somewhat short sighted to exclude such a large proportion of academic high achievers from the boardroom.
However, the benefits of breaking the glass ceiling do not end in the classroom. Many studies have revealed the numerous ways in which appointing women to board level improves overall business performance. For example, a study conducted by Cranfield University showed a steady parallel between share price and women in senior positions.
Another study of Fortune 500 firms, conducted by Pepperdine University in the US over 19 years, revealed the links between female executives and profit margins. The study of 215 Fortune 500 firms indicated a definite correlation between companies appointing female executives and enjoying high profitability. In fact, the 25 Fortune 500 firms with the strongest history of promoting women to senior positions are 18%-69% more profitable than the median Fortune 500 firms in their industries.
All studies and statistics aside, there are some “common sense” arguments for increasing the number of women at board level that are very difficult to refute. It makes little sense to only offer opportunities to half of the talent pool. Whether women are outperforming men or not, they still make up 50% of valuable resources that go to waste when they are unused.
Even if an organisation is happy to only draw upon a limited selection of talent on offer, this can be extremely damaging from a customer perspective. Most companies, particularly consumer businesses, have a diverse customer base, and so it makes good sense to mirror this within its employee demographic.
The business community needs to stop treating gender equality like a chore, or a hassle. Organisations with excellent long-term strategy will see the excellent returns on investment in women at a senior level.
Those who are focused on remaining politically correct without fully understanding what’s in it for them are, frankly missing the point. More companies need to be conducting studies and creating a situation that benefits everyone involved.