Advocating for more women in leadership roles is an important step towards achieving gender equality and creating a more diverse and inclusive society. According to one study, 53 percent of degree holders in Canada are female, yet women are a minority of corporate leaders. Interestingly, women make up 45 percent of all entry-level employees but only 25 percent of vice-presidents and 15 percent of CEOs. Here are several key reasons supported by research and studies that highlight the benefits of having women in leadership positions. The McKinsey Global Institute notes that by accelerating progress toward gender equality, Canada could add $150 million in incremental GDP, or see a 0.6 increase of annual GDP growth.
What follows are some benefits of the increased presence of women in leadership roles:
Improved Performance
Research consistently shows that companies with more women in leadership roles tend to outperform their competitors. A study by McKinsey & Company found that companies with diverse executive teams were 21% more likely to experience above-average profitability compared to those with less diversity. (Source: "Delivering Through Diversity," McKinsey & Company, 2018)
Enhanced Decision-Making and Problem-Solving
Women's different perspectives and experiences bring fresh insights to the table, leading to more effective decision-making and problem-solving. Research published in the Harvard Business Review found that diverse teams, including gender diversity, make better decisions than homogeneous teams. (Source: "Why Diverse Teams Are Smarter," Harvard Business Review, 2017)
Increased Innovation and Creativity
Having women in leadership roles fosters a culture of innovation and creativity within organizations. A study conducted by the Peterson Institute for International Economics analyzed data from nearly 22,000 publicly traded companies and found a positive correlation between the presence of women in corporate leadership and innovation intensity. (Source: "Is Gender Diversity Profitable? Evidence from a Global Survey," Peterson Institute for International Economics, 2016)
Better Employee Satisfaction and Engagement
Companies with more women in leadership positions tend to have higher levels of employee satisfaction and engagement. A study published in the Journal of Business Ethics found that female leadership positively influenced the well-being and satisfaction of employees, leading to increased organizational commitment and engagement. (Source: "Female Leadership and Employee Well-being: A Moderated Mediation Model of Work-Life Balance and Job Autonomy," Journal of Business Ethics, 2020)
Improved Corporate Governance
Gender-diverse boards and leadership teams contribute to better corporate governance practices. Research by the Credit Suisse Research Institute analyzed 3,000 companies and found that those with at least one woman on the board had fewer governance-related controversies compared to all-male boards. (Source: "The CS Gender 3000: Women in Senior Management," Credit Suisse Research Institute, 2016)
Additional Readings
Eagly, A. H., & Carli, L. L. (2007). Women and the labyrinth of leadership. Harvard Business Review, 85(9), 62-71.
Catalyst. (2007). The bottom line: Corporate performance and women's representation on boards. Retrieved from https://www.catalyst.org/research/bottom-line-corporate-performance-and-womens-representation-boards/
McKinsey & Company. (2018). Delivering through diversity. Retrieved from https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Organization/Our%20Insights/Delivering%20through%20diversity/Delivering-through-diversity_full-report.ashx.
European Institute for Gender Equality. (2020). Gender equality in power and decision-making: Toolkit for civil society organizations. Retrieved from https://eige.europa.eu/sites/default/files/documents/mh0919041enn.pdf