International Women’s Day has brought up several stats around women in the workplace, one study that breaks away from the negative outlook is from a Peterson Institute for International Economics working paper from February 2016, showing that:
‘When we examined the profitable firms in our sample (average net margin of 6.4%), we found that going from having no women in corporate leadership (the CEO, the board, and other C-suite positions) to a 30% female share is associated with a one-percentage-point increase in net margin — which translates to a 15% increase in profitability for a typical firm.’
So essentially, when more women are working within the leadership of a company, the more profitable a company generally is.
However, whilst this makes a good looking headline statistic, the reality behind it may show the challenges that many women currently face in the workplace and especially when looking for jobs higher up in an organization.
The other stats that came from the same working paper, which looked at over 22,000 firms from around the world, help to demonstrate this. 60% of all firms asked had no female board members and fewer than 5% had a female CEO. The study also found that having more women on the board rather than just having one as CEO was more beneficial than just having one women in the most senior positions with other board members being predominantly men.
What this 15% profitability stat may therefore suggest is that there is a huge barrier to women getting to the c-suite and only those who perform well above their male counterparts will be considered for these leadership roles. It may well be the case that when choosing between a man and woman with equivalent qualifications and experience a majority male group is likely to choose another male, so the cycle continues. It may, therefore, be a case that only the truly exceptional females who clearly and demonstrably outperform their male counterparts are given the positions.
When there is an increased number of employees who need to jump this higher barrier to get to their position, there is naturally going to be a better performance from that group. If that group happens to be leading the entire company, then, of course, the entire company is going to perform better than their competitors who don’t.
Therefore, this statistic is certainly a nice idea to have, that purely putting women in the boardroom will magically increase the productivity of the company, but the reality is that neither gender is smarter, harder working or more diligent than their counterparts, it may just be that women are not given equal opportunities to excel in leadership positions.
The same broad idea came from the study, which says, ‘Our study found that women’s success in corporate advancement correlates with some basic building blocks: high math scores, high rates of concentration in degree programs associated with management, and liberal parental leave policies (including paternal leave). Success is also correlated with the relative absence of discriminatory attitudes toward female executives.’ It shows that the only thing that is holding women back from equality in terms of getting to the top of the pyramid is basic parental-leave policies and the attitude of others within the company.
We should, therefore, take the time to celebrate the huge achievements of women who are currently blazing a trail and demonstrating how being a leader is not simply about thinking and acting in the same way as the men who preceded them or who compete with them. A particularly interesting fact that came from the same paper discussed how having women in leadership positions have a ‘pipeline effect’ giving women lower down in the organization more of a pathway to leadership and the trailblazers who were some of the first to tread this path should be applauded.
We should be celebrating people like Sheryl Sandberg, who has become something of a focal point for strong women in predominantly male dominated industries with her work at Facebook. Indra Nooyi, who has consistently grown Pepsico’s revenue since becoming first CFO and then CEO, growing the companies profits by 3.8 billion, should be held up as an example to all younger women. Virginia Rometty equally should be seen as a trailblazer, being the first ever female CEO of IBM, a company which is over 100 years old with turnovers exceeding $100bn.
In the coming years we will see more women in leadership positions because of women like this, the ones who have gone above and beyond, who needed to jump that much higher and work that much harder to get to where they are today. On this International Women’s Day, we need to be celebrating the huge achievements of those who have gone before us and allow ourselves to follow the path they created and potentially climb even higher.