By Citrin Cooperman
Are women’s initiatives good for business? What impact do they have on women’s advancement? Should organizations continue to focus on women’s initiatives? Organizations face these questions each year. Fortunately, studies continue to emerge that offer some clarity – women’s initiatives are good for both business and women’s advancements, and organizations should continue to focus on women’s initiatives, or begin to implement them if they haven’t already.
Looking at the statistics from a report released by the BMO Wealth Institute in 2015, you can see the huge impact women are making in the business world:
- Women are the primary breadwinners in more than 40% of American households, which is an almost four-fold increase since 1960;
- Women hold the majority (52%) of management, professional, and related positions in the U.S.;
- Women own 30% of all private businesses, employing more than 7.8 million Americans; and
- Women control 51%, or $14 trillion, of personal wealth in the U.S., with estimates to control $22 trillion by 2020.
With these kinds of responsibilities, professional women have a lot on their plate, in addition to the numerous time constraints and responsibilities pertaining to their lives outside of the office. This is where women’s initiatives can engage and encourage professional women to continue to rise, while also offering support to make it achievable to do so.
So what is in it for the organization?
Continued research shows that companies with women in leadership roles crush the competition! Companies in the MSCI World Index with strong female leadership generated a return on equity of 10.1% per year, versus 7.4% for those without, says a study published by Business Insider (June 2016). Research in Forbes (February 2018) also shows that having more women in leadership leads to better financial performance.
In the early stages of women’s initiatives, many companies thought they had achieved tremendous success by advancing “a female” to a position of leadership. In instances where minimal change occurred, or expected goals weren’t achieved, leaders were perplexed, and the female leader was often left feeling isolated and exhausted serving as the sole face of female leadership for the organization.
Since then, businesses have learned that in order to see a meaningful difference from women’s initiatives, organizations need three females, or 30%, in leadership positions to influence corporate culture effectively. They have also learned that organizations that fill at least 20% of senior leadership roles with women, and have at least 30% women overall, are 1.4 times more likely to experience sustained, profitable growth.
MSCI indicates that just having a single woman on a board does not necessarily lead directly to more profits. The aforementioned study asserts that at least three women are required to be heard and for the dynamics of the board to change substantially.
Furthermore, the data showed having more women leads to better profitability because the organizations have built inclusive cultures which enable everyone to thrive. Organizations with greater gender diversity reported higher levels of collaboration, higher quality leadership, greater agility, and an increased tendency to experiment in pursuit of innovative approaches.
In addition, having more women in leadership positions can lead to a more rapid shift in diversity because women tend to be naturally more inclusive, allowing diversity to evolve more rapidly.
By focusing on women and diversity, your organization can create a greater sense of inclusion so all can rise to greater levels! For ideas on how to implement your own initiative, visit citrincooperman.com/about/womens-initiative.