Here’s How and Why More Women in the Boardroom Is a Good Thing
In most boardrooms, the majority of directors are male. This comes down to outdated biases and a lack of understanding around the benefits of gender diversity.
Below, Agata Nowakowska, AVP at Skillsoft, explains why organisations should boost their female talent pipeline – and how to do it in four simple steps.
A recent study from management firm, McKinsey, found that companies in the top quartile for gender and ethnic diversity are 35% more likely to have financial returns above the industry average. This is because diversity is a proven asset in relation to brand image, as well as customer, shareholder and employee satisfaction. However, in most companies, the boardroom is still predominantly male, despite organisations employing a number of talented and capable women.
Companies in the top quartile for gender and ethnic diversity are 35% more likely to have financial returns above the industry average.
The reason for the imbalance
Earlier this year, FTSE 350 companies were criticised for their comments regarding female leadership. These comments were included in a report for the Alexander-Hampton review, an independent body that aims to ensure that at least a third of FTSE 350 board membership and leadership positions are filled by women by 2020. Executives for these companies were quoted as saying:
- “I don’t think women fit comfortably into the board environment.”
- “There aren’t that many women with the right credentials and depth of experience to sit on the board – the issues covered are extremely complex.”
- “Most women don’t want the hassle or pressure of sitting on a board.”
These quotes shine a revealing – and disappointing – light on some executive attitudes towards female leadership in the UK. It appears those age old, out-dated biases about women not being strategic enough or right for the boardroom still permeate today.
Making a change
Organisations that continue to underestimate the importance of leadership diversity will feel the impact in the long run. Creating diverse leadership teams should be a top priority for organisations, which need to build up their pipelines of female talent to realise the full potential of their female workforce. Today’s businesses must provide all employees – regardless of gender – with well-defined development opportunities to help them grow professionally and advance their careers.
Organisations that continue to underestimate the importance of leadership diversity will feel the impact in the long run.
If your organisation is committed to making a change and wants to push for leadership diversity, these three steps will be an effective starting point:
Ensure pay parity
Female employees need to stand on an equal footing with their male counterparts, so pay inequality needs to be stamped out. Businesses need to calculate the organisation’s gender pay gap and if necessary raise female employee salaries accordingly. When hiring, companies should ensure women and men are on an equal footing from the start and, for entry-level roles, refrain from offering variable pay. For those coming in with previous experience, ensure that an individual’s salary is calculated based on their skills and expertise, rather than their current wages, which could be influenced by past biases or inequities.
Provide unconscious bias training
Gender bias can impact hiring and promotion decisions. For some managers, these biases may be unconscious, with decisions made based on underlying assumptions. Unconscious bias training for those involved in pay and promotions processes is integral to equal opportunities. Once companies identify underlying assumptions, processes can be reviewed to ensure they are useful and accurate. Gendered assumptions need to be uncovered, tested and reframed. Those in the manager’s seat need to be aware of the benefits of diversity and ensure they are not just awarding promotions or pay rises to those who shout the loudest.
Gender bias can impact hiring and promotion decisions. For some managers, these biases may be unconscious, with decisions made based on underlying assumptions.
Plan for the future
It’s critical to identify talented women and look for the best career paths to accelerate their growth and impact. Many companies convince themselves that they are making gender-diversity progress by creating succession-planning lists that include only a few female candidates. Instead, when there is no woman to fill a gap, organisations need to ask why and hold someone accountable for addressing it. If you can see that men dominate your leadership team, a robust succession planning strategy can help ensure that, in years to come, your boardroom is the picture of gender equality.
Ultimately, having more women in the boardroom is good for a company’s bottom line. Addressing this change will mean getting management and executives – who often have unfair, unconscious biases – to recognise their own decision-making processes and make the necessary changes. By creating a strategy that builds a female talent pipeline, organisations will put themselves in better stead for the future and reap the rewards of a more diverse workforce.