New Metrics

The #BusinessCase for Gender Equality in Leadership

“No country can get ahead if it leaves what amounts to half the population behind.” This quote from the McKinsey report, Economic Benefit of Gender Equality, provided a soft opening to a session focused on the data and facts pointing to the benefits of gender diversity in business.

By Catherine Thomason | Published 9 years ago | About a 2 minute read

“No country can get ahead if it leaves what amounts to half the population behind.”

This quote from the McKinsey report, Economic Benefit of Gender Equality, provided a soft opening to a session focused on the data and facts pointing to the benefits of gender diversity in business.

Alison Pyott from Veris Wealth Partnership added that for the first time, we have research that links gender equality in society with gender equality in work, pointing to the holistic benefits of gender diversity. In fact, the McKinsey study cites “$28 trillion of additional annual GDP in 2025 in the full-potential scenario of bridging the gender gap,” begging the question of why aren’t we getting there faster?

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highlights!Saundra Gibson from Credit Suisse offered that although “we conceptually agree having women in the workplace and a diverse workforce makes sense, now, we have statistics to prove that it is financially beneficial for companies to have a diverse workforce,” which starts to remove obstacles for progress.

In fact, according to “The CS Gender 3000: Women in Senior Management”: “Companies with more that one woman on the board have returned a compound 3.7 percent a year over those that have none since 2005.” Adding to this, “We find also that companies with higher female representation at the board level or in top management exhibit higher returns on equity, higher valuations and also higher payout ratios.”

Yet looking further, the data shows that its not just about women on Boards, but rather diversity across multiple levels of management that brings about the most positive returns. Homogeneity is the real enemy, hence funds and investment groups are demanding management-level — not just Board-level — diversity reporting.

Julie Gorte from PAX World Investments added that a “10 percent increase of women in top management positions improves the bank’s future return on equity by more than 4 percent p.a. and this positive relationship is almost twice as large during the global financial crisis than in stale market conditions” — showing that even in stale market conditions, diversity in management brings positive returns.

While the panel agreed that the increase in research and data points is crucial to progress the diversity argument, they were even more aware that the question of whether these statistics are correlation or causation remains unanswered. Susanne Katus from eRevalue also pointed out the importance of using statistics to tell a story so that the information stays with us, rather than being blinded by numbers.