In our article, Women on boards: measures, good practices and examples to follow, we shed a light on the effectiveness of binding measures, such as quotas, which are already being imposed by many European countries. Yet, Canada does not follow this model and does not perform as well as Europe in terms of having women on boards.
Imposing quotas doesn’t seem to be an undisputed solution. How can we ensure the rightful place of women on boards and in important positions within companies, without using quotas?
Convince members of the board of directors by focusing on PERFORMANCE!
Getting your company’s board of directors’ attention is as easy as focusing on a subject that will peak their interest. It’s easy for everyone to agree on the principle of equality and diversity from a moral standpoint. Unfortunately, common sense and morality do not seem to weigh heavily in the decision-making of boards of directors.
The members of the board of directors are numbers-people. How will the measure benefit them? You need to prove to them that more diversity and more women on boards and women holding management positions increases business performance and therefore, the profitability of the company.
More women on boards and in key positions is linked with financial performance
Over the last 10 years, many studies have examined the relationship between the presence of women on boards (and in management positions) and the performance of companies.
In 2007, one study showed a link between better gender balance in executive positions and the rising value of shares and better business performance.
Another study conducted by Catalyst showed, even in 2011, that among the Fortune 500 companies , those with a higher proportion of women on their boards performed significantly better than those without.
In 2014, a joint study by the consulting firm DDI and The Conference Board Research Group showed that companies with the best financial performance were those with at least 27% of women in management positions.
In 2015, The McKinsey Global Institute estimated that gender parity in a company would increase its overall turnover by more than 25% compared to a company that didn’t apply gender parity.
What these studies show is not only the contribution of women to boards, but also their contribution when holding senior management positions in companies.
Women are better leaders than men
According to a study conducted by the Harvard Business Review, from top level management to managers to technical teams, among 16 skills often sought out in a manager, women perform better than men in 15 of those skills (taking initiative, achieving results, motivating and inspiring their teams and even encouraging a sense of initiative in others). The higher the level of the position in the company, the higher the performance gap between women and men, in favour of women!
They also perform in skills usually considered more masculine, like taking initiative and being results-oriented.
Clearly, we need to break down these barriers and end discrimination against women, who are too often victims of prejudice in the workplace.
The presence of women on boards and in top-level management positions of companies has a positive impact on other managers and board members. Women, accustomed to working harder to prove their worth in the workplace, push others to adopt better behaviour, be more rigorous and therefore, perform better. More women holding key positions in the workplace encourages other women to pursue higher-level positions as well.
One success leads to another! Clearly, diversity is driving business performance. Boards of directors have to consider the results of these studies and act now. It’s not enough to increase the number of women on the board, we need to give them positions of power. The more women who have access to higher-level positions, the more they will give rise to other women, encourage diversity and increase the performance of their teams.
All that’s left to do is convince women that they belong there!
Marcus Noland, Tyler Moran & Barbara Kotschwar – « Is Gender Diversity Profitable? Evidence from a Global Survey » – Peterson Institute for International Economics, February 2016
Harvard Business Review – « Are Women better leaders than men? » – March 2012
Karsten Strauss – « Why Women on Company Boards Boost Performance » – Forbes, April 2016
Paolo Gaudiano & Ellen Hunt – « How To Convince Executives To Embrace Diversity » – Forbes, November 2016
Marcus Noland & Tyler Moran – « Study: Firms with More Women in the C-Suite Are More Profitable » – Peterson Institute for International Economics, February 2016
Susan Adams – « Companies Do Better With Women Leaders (But Women Need More Confidence To Lead), Study Says » – Forbes, August 2014
François Normandin – « Les femmes dans les conseils d’administration, une initiative payante » – Revue Gestion, Gestion HEC Montréal, Novembre 2016
Jena McGregor – « More Women at the Top, Higher Returns » – The Washington Post, September 2014