“Gender Balance is not a fairness issue, but a strategic business issue and it is evolving rapidly. Since the beginning of the century, the pace of awareness has changed. Six or seven years ago, a very limited number of business leaders would have said that it is a business issue. And you would even have had some women executives who'd have said it is not. Things are different now.”
Olivier Marchal, MD Bain and Associates1
The world is changing. Last year, 60% of US graduate students, 48% of medical students, and 47% of law students were women. Women now contribute 40% to the world's GDP and control more than 80% of consumer goods purchasing. They also make 80% of healthcare decisions.2 Pepperdine University researcher Roy Adler tracked years of 200 of the Fortune 500 companies and found “the correlation between high-level female executives and business success has been consistent and revealing.”3 In measures of revenue, equity, and assets, companies that had the best promotion record for women outperformed industry medians every year (tracked 2004-2007). Likewise McKinsey & Company compared the 89 European listed companies with the highest level of gender diversity in top management companies to industry averages in return. They found that the companies with more women on average outperformed their sector in return of equity (10%), operating result (48%), and stock price growth (1.7×) from 2005 to 2007.4 In addition, and perhaps as important in the current economic environment, companies who have more women on their leadership team are less likely to go bankrupt. A United Kingdom study by Nick Wilson tracked 17,000 UK companies and found those that had at least 1 female board of director decreased their chance of bankruptcy by 20%.5 Women board members may be closer monitors. A University of Queensland/London School of Economic study found that women on S&P 1500 board of directors are more diligent about meeting attendance and more likely to sit in committees like auditing and governance, and that gender-balanced boards are more likely to scrutinize a CEO's poor performance.6
“While male values are about risk taking, short term gain and a focus on the individual, female values tend toward risk-awareness, the long term and team goals. What is needed for a successful future is a better balance of the two and a focus on long-term sustainability.”
H Tomasdottir, Icelander fund manager who predicted economic collapse7
Adding 1 woman to a leadership position may broaden a discussion but adding several changes it altogether. McKinsey and Company looked at gender differences in 9 important organization behaviors that improve organizational performance (Table 106-1).8 The only 2 behaviors that men had a distinctive advantage over women were individualist decision-making and control/corrective action. Women edged men out in 5/9 of the other indexes. This and other studies suggest that companies ...