Sometimes it’s hard to believe that we’re living in 2018. A recent report of the top 10 excuses used by FTSE chairs and chief executives for not appointing women executives reveals archaic, and frankly shocking, attitudes to women continuing to haunt company boardrooms. Women, according to some of those asked, don’t fit comfortably into the boardroom, can’t cope with ‘extremely complex’ issues and simply ‘don’t want the hassle’ of sitting on a board.
As educators, we naturally feel the urge to enlighten some of our esteemed FTSE leaders. So here, in no particular order, are 10 compelling reasons to have women on company boards.
1. Women directors change the way boards work – for the better
According to The Harvard Business Review, women bring different perspectives and experiences – as well as approaches to decision making - to the boardroom. Female directors ask more questions and are less willing to make decisions they don’t fully understand. They tend to have a different style of engagement, seeking a spectrum of opinions before making final decisions.
2. Companies with gender diverse boards make more money
A report by MSCI, which researched 4,000 public companies across the globe, found that companies with strong female leadership generated a return on equity of 10.1% per year versus 7.4% for those without. It’s not just about profit either; the report also shows that companies with below average gender diversity suffered 24% more ‘governance-related controversies’.
3. Increasing the number of women on a team increases its collective intelligence
Research has shown that having a gender diverse team increases the collective IQ of a group. Having more women on the board is literally a smart choice.
4. Gender diverse boards attract investment
Big investors, who are increasingly conscious of societal issues, are seeking out firms with gender-diverse boards. Helena Morrissey, Head of Personal Investing at LGIM and founder of the 30% Club, has just launched a £50m fund specifically for investors wishing to put their money into companies with gender-diverse boards.
5. Women are the prime financial decision makers…
What better way to understand your biggest market than listening to it? Studies have shown that women are the prime decision makers when it comes to purchases large and small.
6. …and can supercharge the world economy
Gender equality has the potential to be the single biggest difference we can make to the world economy. If women around the world achieved economic equality with men, it would contribute $28 trillion to the global economy, roughly the size of the economies of the United States and China combined. Women are the ultimate economic accelerator.
7. Women own the social web
Women are not only making the big spending decisions, but they’re also the dominate force on social media. In the US at least, every major social media network – Facebook, Instagram, Pinterest and Twitter – has a higher proportion of women than men using it. If you want your company to win friends and influence people, make sure you have strong female voices around the boardroom table.
8. You have to see it to be it
An oft-cited excuse for the lack of women on boards is that there aren’t enough women in senior positions. Well, there is a strikingly simple remedy – promote more women into the boardroom and watch as the next generation of female leaders are emboldened to power through.
9. Women are more likely to be effective leaders
Analysis shows that women tend to exhibit many of the traits associated with effective leadership - effective communication, a tendency to empower all team members, and creative problem solving. They are also more likely to adopt effective leadership styles than men. At the GDST, we see these traits showcased every year during our Young Leaders’ Conference.
10. Women make up 51% of the UK population
So there really is no excuse for this not being reflected at board level (or for that matter in politics, media, science, and a whole host of other sectors). It’s just the right thing to do.