Recently, I gave a presentation that really got me thinking about the systemic imbalance in diversity on boards, especially the lack of women. While it is true that companies miss big business opportunities without gender diversity, I was inspired to research one particular question:
What can company corporate boards gain from having more women representation?
The imbalance of women in the business world is not for lack of talent. Since 1982, almost 10 million more degrees were earned by women than men. Women account for 50 percent of stock ownership, and yet only 12 percent of the world’s board seats are held by them.
Many studies have demonstrated that companies with more women on boards are more profitable. If we look at the main objective of a board — monitoring company’s operations and assessing the direction of the business on behalf of their shareholders — we can see how this role consists of having a wholesome, strategic view of markets. Higher female board representation translates into bringing a broader perspective to strategy and contributing a diverse set of experiences and backgrounds when making decisions. When it comes to communication, women tend to be more inclusive in their interactions, by listening to those who speak and asking questions to those who don’t. Gender-balanced boards cannot only better represent shareholders but also better connect with the investor community, employees or the communities in which they operate — all translating into the financial well-being of the company.
We are moving into an extremely connected and global economy where information travels fast and decisions are made very quickly. As such, companies should profit from tapping into the skills women bring. Egalitarian team playing is crucial because it enables individuals to complement each other. Teams can become more cooperative and flexible.
For example, in the work I lead on introducing creative techniques to businesses operations, teams that thrive are those that can generate new ideas by embracing ambiguity. They come up with innovative solutions by being mentally flexible. They approach problem-solving not only in a linear, systematic way, but also in a holistic pattern, considering more options and details.
This ability to think more broadly can also contribute to long-term strategy planning in corporate boards. It allows them to evaluate numerous complex situations, predict outcomes as part of a larger picture, recognize patterns involved and plan a course of action with a long-term perspective in mind.
Another benefit that company boards can reap is in communications. In my experience gender-balanced teams are better in social skills, verbal acuity and expression; they can better tell a story that links decisions with business objectives (see my article on “Storytelling for Business Success” for why it’s important). Words can bring about change, and in today’s digital age, where social media is an ever-transformative medium, those who can put the right words together and know their audience best have the power to shape minds.
Of course, intuition, imagination and empathy displayed by individual team members play a big part in the strategic process. It can be the secret sauce in supporting executives in their duties, managing resources well and setting broad goals for the company. Having an egalitarian gender balance of power in corporate boards is an alternative to the command-and-control leadership, promoting the company’s success for the benefit of its members as a whole.