Women in top brass unlock the profit potentialAug 03, 2019(11:34)
More women in our Boardrooms can result in increased profitability for the company. It may seem fictitious. The astonishing fact is that $12 Tn could be added to the world’s GDP by 2025 due to advancement of women’s equality in the workplace according to a study by McKinsey Global Institute. Women's economic empowerment boosts productivity, increases economic diversification and income equality says a UN report.
It is also evident from the study of Fortune 500 companies that with higher number of women in leadership positions, the companies performed better on average in return on sales, return on equity and return on the investment. If women's participation in the labour force is raised to the same level as men, India's GDP can increase by 27%, according to IMF Chief Christine Lagarde and Norway's Prime Minister Erna Solberg.
We have very few women in the top brass and this lacuna is not due to a lack of capabilities, but due to prejudices against women. Even more encouraging is that a country’s GDP can be improved substantially if the participation of women in employment increases. Intriguing? But, yes data says it all. Women workforce and economy of any nation are interconnected though the workplace or any other environment fails to give women their due share both in terms of wages or opportunities. Inspite of being endowed with remarkable characteristics, it is an irony that women occupy only a miniscule percentage in senior levels. According to a 2018 study by LEAN IN, in 279 companies, representing 13 million employees, women represent just 23% of the senior level occupants (direct reports to the CEO) and senior vice presidents, 29% of the vice presidents and 34% of those at the senior manager and director levels. An uptick in female CEOs in Fortune 500 companies this year provides a sense of relief; 33 of the companies on the ranking of highest-grossing firms will be led by female CEOs for the first time ever. But even this translates to just 6.6%.
The unwarranted bias against women is causing a large dent on the economy. Gender diversity in corporate sector is the need of the hour as it will bring in vibrancy, different perspectives, improved decision making and innovation. It’s time we realize the contribution made by women leaders in businesses and organizations.
Inherent qualities such as resilience, self development, integrity, honesty, empathy, intuitive nature make women powerful leaders. They are perceived as competent as men and even score higher in 12 out of 16 competencies that make outstanding leaders according to a study by Zenger Folkman.
Recently, India's Anshula Kant was appointed as the MD and CEO of World Bank and Christine Lagarde is set to become European Central Bank’s first women president later this year. Though these sound to be encouraging, there is a long way to go. This year’s Economic Survey poignantly refers to the role played by behavioral economics in bringing a tremendous change in the behaviour and mindset of people. Schemes like Beti Bachao Beti Padhao have made a positive impact by increasing awareness about gender equality.
Gone are the days when leadership was conceived as a male bastion and leaders with qualities such as aggressiveness, narcissism and authoritative nature were appreciated and respected. Growing cultural diversity in our current working scenario, emphasizes the need of a dynamic leadership. Women are best at this as all studies point out.
When provided equal opportunities, women transform people and even nations. They bring a whole new perspective to various issues and are bold decision makers. Women in senior levels are associated with higher profitability according to a study by Peterson Institute of International Economics wherein an analysis of around 21000 global public traded companies in 91 countries showed that having at least 30% of women in leadership positions adds 6% to net profit margin.
Women in the top rung have a transformational style of leadership as they employ a holistic approach towards work by being multi-taskers, empathetic and easily adaptable. Female corporate leadership exceeded 40% only in three industries: health care, education, and the nonprofit sector—industries according to the World Economic Forum.
As per Global Gender Gap Index (2018), there are just 17 that currently have women as heads of state, while, on average, just 18% of ministers and 24% of parliamentarians globally are women. Angela Merkel, Chancellor of Germany, Queen Elizabeth II of UK and Jacinda Ardern, Prime Minister of New Zealand are few of the most powerful female heads of state globally. Patriarchal beliefs and misogynistic mindset ingrained since many centuries impede the progress of women in all spheres. Equal participation of men and women in the workforce would benefit all the stakeholders in any ecosystem.
The phenomenal capabilities of women have to be nurtured and appreciated. The ability to understand one's own emotions and others as well is a prerequisite for any successful and transformational leader and women are endowed with such a kind of emotional intelligence naturally. It has taken aeons for women to break the cultural and structural barriers thrust upon them. As we are faced with a myriad of problems, leaders with vision, relentless spirit and broad mindedness only can create new chapters in the annals of history. For nations to prosper, we need powerful and strategic leaders at the helm who can drive people towards a common goal. If more women in top positions translates into a nurturing and creative environment resulting in the betterment of everyone, why curtail their wings?
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