In the 50-plus years since the Equal Pay Act became law, most successful organizations have worked to diversify their workforces. The efforts are salutary and well-intentioned, driven more often than not by appeals to social justice and the desire to ensure that people are treated fairly and given equal access to opportunity. But if the motivations are primarily moral and legal, businesses neglect even more persuasive, common sense logic for changing their cultures.
Plenty of empirical evidence attests to the benefits of placing equal value on the work men and women do. It’s not simply a matter of unequal wages or discrimination, however much those things offend basic ideas of fairness and democracy. It’s about reevaluating outmoded practices and reducing institutional friction within the organizations that drive our economy forward. It is about profits, results, and the ways businesses effectively cultivate the most talented employees and reap the benefits of diversity.
Let’s start at the top. Research confirms that women are significantly underrepresented in corporate boardrooms and corner offices. Overall, women hold only 19 percent of board positions in the U.S., compared with more than 30 percent in France, Norway, and Sweden, despite accounting for nearly 40 percent of MBAs and 40 percent of managers.
The problem is not limited to the United States. A study by the Peterson Institute for International Economics showed that 60 percent of nearly 22,000 global companies surveyed didn’t have a single female board member, and slightly over half lacked women in the C-suite. Fewer than five percent had female CEOs.
Yet, data shows unequivocally that gender parity at the top correlates with better results on the bottom line. The Peterson Institute study found that for profitable businesses, evolving from exclusively male corporate leadership to having 30 percent women at the top corresponds to a 15 percent increase in profitability. A 2015 McKinsey report estimated that if women were to achieve full parity with men by 2025, annual global GDP could grow as much as $28 trillion, a 26 percent increase in wealth.
Why is having women in leadership roles such a boon to corporate profitability? Perhaps it’s because women tend to communicate in “relational and affirming” ways, broadening conversations to embrace everyone’s strengths. This kind of communication style not only brings valuable insight to the boardroom, but also drives positive changes in organizational culture. Teams with more women find richer solutions to pressing problems because, in many instances, women, more than men, encourage colleagues who might otherwise not speak up to share their ideas and opinions.
One thing is clear: The companies that lead growth in this century will be those that develop a pipeline of female managers that, over the long haul, brings women into leadership positions.
Fortunately, companies like ours are blessed with a wealth of talented women who drive success at every level. Among them is Rebecca Ballard, H+K senior vice president and U.S. head of communication and culture, based in our Washington, D.C. office. She spearheads H+K’s official women’s network, the HER (Helping Executives Rise) initiative, which celebrates its two-year anniversary this month. Her efforts are helping to drive positive change that will increase diversity and transform our culture to more effectively encourage talent wherever it lies. One of the most promising initiatives is “mentorHER,” a program focused on connecting and training women for leadership.
Rebecca and her colleagues understand that H+K’s continued success hinges on our ability to foster the individual strengths of every employee. We are well aware that to keep our best employees, we must recognize and nurture their talent, encouraging them to rise as high as they possibly can. In our client-centered industry that means we should see women leading our most important client teams, and we do—women lead at least 50 percent of our client teams around the globe when looking at our top 100, top 50, and top 10 accounts. When companies shatter glass ceilings, they give themselves permission to grow faster than they ever dreamed.
Companies that nurture diversity and have women in leadership roles outperform their competitors. A recent McKinsey report shows that among the best performing S&P500 firms, women occupy at least 33 percent of board seats — and up to 60 percent at some of the most successful companies. It’s an encouraging trend: Since 2005, female representation on such boards has increased, on average, by 24 percentage points. So go ahead, shatter that glass ceiling. Your shareholders will thank you.