Companies looking for a way to increase their bottom line might consider a slightly different method: increasing the female population amongst leadership positions. According to a 2016 report from The Peterson Institute for International Economics, increasing women in these roles often leads to higher profits. This might not be the only benefit that companies could see either. Businesses with women on their boards can see improvements among social performance and social responsibility as well.
The report (which was just the most recent in a long of reports that came to the same conclusion) analyzed 87 studies from over 20 countries to find these results, which have had experts weigh in on the subject. How does promoting more women to leadership positions impact companies so much? Some people believe that women excel at thinking broadly and may focus more on social aspects than men, historically, have done. Female leaders often think about their thought processes first in terms of relationships with other people, and this type of thinking can translate to the company in terms of employees, customers, and even office culture.
Other factors include the higher level of education that most women have when they reach these leadership roles and the increased level of inclusion when it comes to making decisions and gathering information, which leads to a more prepared stance. One of this paper’s co-authors, Lehigh University professor Corinne Post, notes that others in the organization, including men, may similarly increase their preparedness in response to a female leader.
There is one caveat, however. If companies don’t genuinely consider the input given by women leaders, there may never be tangible change. After all, hiring or promoting women to these positions while ignoring their experience and expertise will lead to little or no growth.
While including more women in these higher roles can have positive outcomes, it doesn’t necessarily guarantee that the company will directly perform better. To do better, a company must employ various strategies, especially those that boost accountability. This is why giving shareholders more access to what happens behind closed doors can make a difference. When shareholders are allowed to provide their own perspectives and women are given these roles in leadership, companies can begin to see positive results. However, there is a direct correlation between company improvement and an increase in female leaders.