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Gender Diversity Dividend

The Gender Diversity Dividend

Gender diversity pays dividends. In fact, women leaders are good for business. Conventional wisdom holds that the more diverse a team, the better. The more cultures, the more ethnicities, the more racial types, the more genders (male, female, and shades in-between), the more sexual orientations, and the more diverse world views, then the more innovative a company will be. However, there are specific advantages to promoting women into leadership roles.

Women Leaders Are Good For Business

Tomas Chamorro-Premuzic writes in Forbes that women leaders improve financial performance metrics. But that’s not all. They also reduce the likelihood of lawsuits, reputational scandals, and corporate crime, and improve Corporate Social Responsibility (CSR) and Environment, Social and Governance (ESG).

Women also outperform men in education, while men score higher than women on the negative personality traits that make workplaces toxic, such as unprovoked aggression, narcissism, psychopathy, and Machiavellianism.

“Over the past decades, scientific studies have consistently shown that on most of the key traits that make leaders more effective, women tend to outperform men. For example, humility, self-awareness, self-control, moral sensitivity, social skills, emotional intelligence, kindness, a prosocial and moral orientation, are all more likely to be found in women than men.”

Tomas Chamorro-Premuzic, Forbes

Given all the above, what is the business case for having so many men in leadership positions? In another article in Forbes entitled If Women Are Better Leaders Then Why Aren’t They in Charge?, Tomas Chamorro-Premuzic observes we don’t really select leaders on the basis of their actual potential, talent, or competence. If we did, then we wouldn’t just have more women leaders, but more female than male leaders.

Men Dominating Senior Leadership is Male Privilege

In other words, he argues, we choose more men because most companies are inherently sexist. When we could optimize the world for “progress, wealth, and fairness” by promoting more women into the C-suite, we promote more men into leadership roles. While we pretend to pick executives because they’re more qualified, instead, we perpetuate a status quo that benefits those who are in charge. According to McKinsey, the world’s GDP is $12 trillion lower because we lack gender equality. According to the World Bank, sexism at work is costing us $23 thousand per person in lost earnings, and $160 trillion in lost human capital (twice the global GDP).

“We live in a sham meritocracy, where we pretend to pick the best person for each job, while simply picking those we prefer: and when the jobs pay well, they are still overwhelming male. Our preferences are based on style rather than substance, so we pick individuals for leadership on the basis of their confidence rather than competence, charisma rather than humility, and narcissism rather than integrity.” 

Tomas Chamorro-Premuzic, Forbes

Out of 20 CEOs, Just One is a Woman

Of course, the utter irony is that women leaders are nowhere near approaching the 50% point of gender equity in the executive suite of most major corporations.

 According to Deloitte, women held an average of 19.7% of the seats on boards of directors in 2021. As for Chief Executive Officers? Only 5% of CEOs are women. That means for every 20 Chief Executive Officers, 19 are men and just 1 is a woman.

Gender Diversity Dividend

Women Leaders Make Better Teams

When professors Anita Woolley and Thomas Malone studied the factors that increased a group’s collective intelligence, they made some surprising discoveries which they describe in a Harvard Business Review article. It is entitled Defend Your Research: What Makes A Team Smarter? More Women.

High IQs Don’t Make Better Teams: Women Do

According to the article, researchers “gave subjects aged 18 to 60 standard intelligence tests and assigned them randomly to teams. Each team was asked to complete several tasks—including brainstorming, decision making, and visual puzzles—and to solve one complex problem. Teams were given intelligence scores based on their performance. Though the teams that had members with higher IQs didn’t earn much higher scores, those that had more women did.”

So forget about sprinkling in just a few women to ensure diversity as is so often the case.  To make teams smarter, instead of a soupçon of females, we’re talkin’ “beaucoup” –  a plurality that by definition is most decidedly not diverse from a gender perspective.  The only caveat is that the benefit may wane at the extreme end. Consequently, you don’t want a team to be completely devoid of men.

Women Executives Excel as Team Players

So how is it that women make groups more intelligent? It turns out we are great team players. Apparently, it’s written in women’s DNA. We are masters of communication (listening) and constructive criticism. We are open to ideas and we’re not as autocratic as men.  Our natural ability to play nicely with others not only demonstrates how smart women are, but how we elevate the game for all involved.

The research makes a strong case that the best man for the job may, in fact, be a woman. Lots of them.
For more of our blog posts on diversity, check out our Diversity Recruiting Collection.

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Krista Bradford

Krista Bradford

Krista Bradford is CEO of the retained executive search firm The Good Search and of its research division Intellerati. A former award-winning television journalist and investigative reporter, Ms. Bradford now pursues truth, justice, and great talent in the executive suite.View Author posts

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