Across Europe, women represented 24% of corporate board members in 2015, according to Credit Suisse, up from a 14% average in 2010. It’s an encouraging sign that women are rising to the uppermost leadership positions.
But look more closely and the gains may seem superficial. The boardroom trend, driven in part by government quotas and voluntary targets, hasn’t necessarily translated into more women in senior executive roles.
‘Overboarding’ and creative moves like reducing the number of directors to meet quotas can mean that such percentage-based targets may actually pinch the leadership pipeline for women and reduce the pool of talent available for top-tier positions.
In a disrupted world, organisations need to take advantage of the most complete pool of available talent possible. I believe that women’s talent in particular will be needed as technological, demographic and social change accelerates. That requires more than just increased diversity on boards. We must ensure that women’s talent is harnessed and developed at all levels – from executive committees to entry level positions.
Diverse leadership improves performance
Diversity matters for performance – but ‘where’ that diversity sits on the org chart makes a difference. A study from the Peterson Institute of International Economics suggests that more women in corporate leadership indeed improves results, but the largest gains are not from more women board members but from greater numbers of female executives.
“This pattern,” they argue, “underscores the importance of creating a pipeline of female managers and not simply getting lone women to the top.”
Women’s creativity and talent unequivocally help companies perform better. Research from McKinsey finds that the most gender-diverse companies tend to outperform their sectors by 15%. Further, advancing the equality of women in the public, private and social sectors could add some $12 trillion to the global economy by 2025.
Nurturing a good flow of candidates
So how do we maintain a critical mass of women leaders in the pipeline? It starts with organisations hiring women with leadership potential and taking steps to root out biases in interview and assessment processes.
A Women in Business and Management report from the ILO emphasises the importance of women having equal opportunities, feedback, mentoring and training as men over the course of their careers. It’s also vital to cultivate strong networks of women at junior and middle-management levels to ensure that women do not ‘drop out’ and shrink the available pool of candidates for top jobs.
A company’s commitment to gender parity should be fundamental and non-negotiable, and these commitments are strongest when senior leaders make them a personal priority. Take the example of the strategy of UN Secretary-General António Guterres, who calls gender parity not just a moral duty but an ‘operational necessity’. Indeed, senior leaders must take an active role in creating inclusive company cultures and changing mindsets.
Seeking new perspectives in a complex world
Few would deny that uncertainty is the byword of the day in a world that is constantly in disruption and flux. According to research from Grant Thornton, women are more aware of the need for leaders to operate under uncertain conditions. We must ensure that the organisations of the future maintain flexibility and adaptability, and cultivating a pipeline of women leaders is an important part of developing that capacity for change.
What will define the successful leader of the future? How have the leadership styles of women in power redefined what ‘feminine’ leadership qualities mean, and why does it matter? Moreover, as our understanding of an organisation’s ‘performance’ expands to include greater responsibility towards and engagement with communities, does it mean that different types of leadership will be needed?
One thing that is certain is that we’ll need every ounce of our collective creativity to navigate a continually changing environment. And that means not denying ourselves the perspectives and talents of 50% of the population.
At the Women’s Forum for the Economy & Society, we know that gendered perspectives can unlock new ideas, provide fresh points of view and drive change. Human talent – and particularly women’s talent – is our most valuable resource in the face of global challenges. It will play a transformative role for our institutions in a changing world – and we believe that successful businesses won’t leave that potential behind.