You can’t have escaped the recent focus on gender equality. The spotlight is on pay parity and equality of opportunity.
Something that has been particularly in the public eye is the lack of women in senior leadership positions.
Just last week, a report showed that no FTSE100 boards include more women than men. Firms are under pressure to effect change.
But rather than improving equality through a sense of obligation, or fear of inaction, how many organisations have considered the commercial benefits of having more female directors? Here we look at the reasons why a more diverse board could benefit your business.
The financial benefits
A recent paper from risk experts Aon quotes McKinsey research stating that gender parity could add $12 trillion to the world economy by 2025. A Grant Thornton article, also quoted in the Aon paper, suggests that firms with more diversity in leadership positions tend to be more profitable.
The strategic benefits
Boards are about making strategic business decisions – the choices that determine the direction, and ultimate success, of your organisation. Being able to make these decisions effectively, having considered all the options, is therefore essential.
Research by board search firm Fidelio partners looked earlier this year at the attributes shared by successful directors. One of these was the need for presence and authority without being over-bearing, to help the board to make rounded decisions.
An article last year looking at whether the female brain may be the secret weapon of the best boards claimed that typically female characteristics such as empathy, intuition, and creativity can be essential to making the best decisions.
Because women are less likely to make choices based on incomplete information, having more women involved in board discussions can help to ensure that strategic decisions and direction are based on the full picture.
Many of the qualities that are seen as important in board members – an eye for detail; the ability to constructively but sympathetically debate issues – are often seen as things that women have an affinity for.
And good decisions come from diverse boards, with a range of views. Research into the ideal mix of perspectives in the boardroom shows that having a good of blend of opinions, skills and experience will help you to avoid groupthink, herding and the other behavioural tendencies that hinder good decisions.
How to achieve these benefits
So, the advantages of more gender-equal boards are clear…but how can you achieve them?
The Aon paper suggests encouraging more women to the C-Suite by increasing their sense of influence; encouraging career paths via mentoring, education and support; and helping the entire workforce to enjoy more flexible working – which shouldn’t and can’t be exclusive to female members of staff, but appeals particularly to women because, in the words of an Aon expert, ‘most women highly value workplace flexibility because of their commitments outside of work and desire to live a more holistic life’.
Some of the skills and strengths women bring to your board can also be encouraged across your entire C-suite.
Giving your directors the information they need can help bolster strong decision making. Making sure you avoid some of the social
And you can maximise the effectiveness of your board by adopting some techniques from behavioural science.
Whatever the composition of your board, giving your directors the tools and data they need to make effective strategic choices is essential. This means running meetings efficiently and providing user-friendly board packs.
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