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Female leadership improves financial performance, survey finds

But unconscious bias and firm culture continue to hinder women's progress

16 January 2015

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By Manju Manglani, Editor (@ManjuManglani)

High-performing organisations actively focus on gender diversity, global research has found.

It calls on businesses to do more to accelerate women's progress, following predictions by the World Economic Forum that global gender equality in the workplace will not take place until 2095.

"As we think about the keys to growth, business, nations and economies cannot afford to wait another 80 years to fully engage the talent represented by the world's women," commented Mark Weinberger, global chair and CEO at EY, which commissioned the research.

The international survey of 400 leaders in US$500m to US$1bn+ companies found that a clear path to leadership, a supportive organisational culture, flexible working arrangements and work-life balance are key to women succeeding.

About two thirds of respondents to the research said that companies with women in senior executive leadership roles achieve better financial and non-financial performance.

A similar amount said that companies with women on their board of directors achieve better financial and non-financial performance.

Non-financial performance benefits include better governance, corporate social responsibility, innovation and talent retention.

High-performing companies enable women to thrive

The research found that the highest performing companies surveyed are doing much more to encourage the advancement of women than the lower performing companies.

Interestingly, the most common way that high-performing companies support women is by implementing flexible working arrangements for men (33 per cent).

"When men have more flexibility, they can devote more time to child care and household responsibilities as well as other interests. That can help free women to spend more time on their careers," says the report Women. Fast forward: The time for gender parity is now.

Another big factor is the tone from the top: 31 per cent of respondents in high-performing companies said their CEO provides active support for women inside and outside the organisation.

Also important is creating dedicated programmes to expose women to all company operations and functions (28 per cent).

Ranking joint fourth for respondents in high-performing companies is implementing flexible working arrangements for women and establishing targets or quotas for female leadership representation.

Other ways in which high-performing companies support women's advancement include leadership pipeline programmes that include women, appointing male sponsors to female employees and developing women's networks.

"The highest-performing companies in our study help women navigate their careers in many different ways," says the report.

"These programs have an impact - 64% of high performers report that men and women have equal influence on strategy in their organizations, compared with only 43% of the lower-performing companies. This is particularly important for women in mid-career, which men and women agree is when the most intense career challenges occur."

The top accelerators of women's success

When asked to share their experiences and observations on the most important enablers to women's acceleration in the workplace, good opportunities for progression was highlighted as the single biggest factor for women and the second-biggest factor for men.

Instead, male respondents suggested that a supportive organisational culture is the top accelerator - a factor which ranked last for women.

Female respondents said the bigger enablers are an appropriate work-life balance, followed by flexible working arrangements and leadership by example.

Men listed unconscious bias (26 per cent) as the top barrier to women's acceleration, followed by a lack of support from male leaders (24 per cent).

"Without a little nudge, it's easy to gravitate toward colleagues and leaders who think, look and act like we do," commented Beth Brooke-Marciniak, EY's global vice chair of public policy.

"Unconscious bias on the part of those in power is undoubtedly partly responsible for the glacial pace of change."

The EY report identifies three steps that organisations can take to help accelerate gender equality.

  1. Illuminate the path to leadership. Good opportunities for progression are considered a top enabler by men (26 per cent) and women (35 per cent), suggesting that organisations must work harder to make the path ahead clearer to women, demonstrate what is possible and show them career opportunities that match their skills and ambition.

  2. Speed up culture change with corporate policy change. The twin enablers of work-life balance and flexibility are high on women's list of accelerators. Informal flexibility for both men and women is highly effective in helping all employees to balance their personal and professional lives.

  3. Establish a supportive environment and work to eliminate conscious and unconscious bias. Men cited unconscious bias as the number one barrier for women in the workplace. Twenty-seven percent of men said that, in their own experiences having a supportive culture is the best way to support women's career advancement. To advance women, leaders must spread an organisation-wide message that bias is unacceptable.

The survey, which was conducted by Longitude Research, received 400 responses from managers (of which 50% are in the C-suite) in a cross-section of industries worldwide. Respondents' companies had minimum revenues of US$500m and half made more than US$1bn.

 

 

 

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