One need look no further than the numerous reports and comments made by influential professionals—both male and female—for evidence that gender diversity, as well as adding and escalating women in corporate roles, are key drivers of business growth.
In tackling the much debated topic of the need for more women to occupy the higher ranks of workplace culture, Securities and Exchange Commission Chairwoman Mary Jo White, herself a former director of a public company, said during a mid-September speech before the SAIS Global Conference on Women in the Boardroom that while women have made strides in climbing the corporate ladder, “greater boardroom diversity has not, in my view, received sufficient attention, nor has the importance of addressing the under-representation been accorded the urgency that I think it deserves.”
A woman with many high-level achievements to her name, White went on to note recent surveys showing, for instance, that in 2012 and 2013, women occupied just over 16% of the board room seats of Fortune 500 companies, and that percentage is nearly the same as it was in 2011. Another study showed that in 2013, more than 90% of the S&P 500 companies had at least one female director. Ten percent of U.S. companies still do not have any women on their boards, she said.
While there’s been progress, White said, “the remaining chapters to write are especially apparent in the American boardroom and C-suite where the progress of gender diversity has been frustratingly slow.” She cited a study by Stanford that showed the average U.S. Fortune 250 company did not elect its first female directors until the mid-1980s.
White’s comments about women’s skill-sets ring true for any profession.
Said White: “Women are receiving more than half of all bachelors’, masters’ and doctorate degrees, and more than a third of MBAs. Women are approximately half of the total work force and half of all managers. We are here, and we are qualified.”
Indeed, Joe Keefe, president and CEO of Pax World Funds, who’s been very outspoken about advancing women in the workplace, has been quoted as saying that “having more women members on corporate boards improves decision-making and governance, and boosts the bottom line.”
Said Keefe: “Where women do better, companies do better. Countries with better gender equality have more economic growth, and it’s the same with companies. Gender needs to be looked at as an investment factor.”
More and more research shows that increasing the number of female employees you have will boost your firm’s bottom line.
Kathleen McQuiggan, senior vice president of Pax World Management, cited comments made by Keefe during her keynote address in late April at the Certified Financial Planner Board of Standards’ release of its Women Initiative (WIN) white paper release event in New York City.
McQuiggan recited these comments made by Keefe: “When women are at the table, good things happen. The conversation is richer, the decision-making process is better, teams are more innovative and collaborative, and the whole organization is stronger.”
Indeed, a recent WIN newsletter cited a March 2014 white paper dubbed “Innovation by Design: The Case for Investing in Women,” published by the Anita Borg Institute, which found there are four key advantages that firms and organizations can expect to realize by increasing the number of their female employees:
Improved operational and financial performance
Better problem solving and team performance
Enhanced firm reputation among prospective hires and clients
Last year, the Credit Suisse Research Institute conducted a study of almost 24,000 global companies and found that those with female directors outperformed those without female directors in return on equity, average growth and price-to-book value multiples. The bottom line: Companies with at least one female director had better share price performance than companies without women for the last six years.
The CFP Board and other industry groups have noted the surge in interest among planning firms to reach more female clients—after all, stats show that women control more than $20 trillion in investable wealth in the world—but there’s also an increasing desire to have planners look more like the clients they serve.
A recent Cogent Reports study evaluating the unique needs and behaviors of affluent female investors found that 73% of those investors work with an advisor or investment professional to manage their portfolios versus 67% of affluent men.
The Cogent study also addressed misguided notions around female investors, for instance, in risk tolerance. In households where there is a sole decision maker (female or male), the study found the smallest proportion of assets in low-risk-tolerance investments. When looking at shared decision maker risk tolerance, the household becomes more risk averse, the study found.
Another example is with female sole decision makers—nearly half (46%) are married or partnered so being in a committed relationship does not necessarily dictate a woman’s financial decision-making role, the study asserted. Regardless of gender, the decision-maker role can influence household investment decisions, which could have a substantial impact on portfolio return, the study found.
A 2012 McKinsey & Company study, “Unlocking the Full Potential of Women at Work,” found that more than 80% of participating companies’ HR leaders believe that gender diversity is a “business imperative.” Said the study: “CEOs articulate simple, compelling rationales: ‘getting the best brains to work on the problem’ or having ‘a work force that better matches their customer’s demographics.’”
An interesting finding by Anita Woolley, an assistant professor of organizational behavior and theory at Carnegie Mellon University, and Thomas Malone, the Patrick J. McGovern Professor of Management at the MIT Sloan School of Management and the founding director of the MIT Center for Collective Intelligence, that women added to the “collective intelligence” of teams was published in the Harvard Business Review in June 2011.
The study’s finding: “There’s little correlation between a group’s collective intelligence and the IQs of its individual members. But if a group includes more women, its collective intelligence rises.”
Indeed, Malone said the following regarding the study’s findings: “The standard argument is that diversity is good and you should have both men and women in a group. But so far, the data show, the more women, the better.”
Music to my ears.