• Randy Sklar

IT PAYS TO HAVE WOMEN IN BUSINESS


So Why Aren’t There More of Them?


Have you heard of the women’s leadership gap? In a 2018 article, the Center for American Progress described it with these statistics: Women make up more than half of the U.S. population, earn more bachelor’s and master’s degrees than men, and almost match men in the number of law (48.5%) and medical (47.5%) degrees they earn. And yet, they’re extremely underrepresented in company leadership. For example, while 45% of legal associates are women, they make up just 22.7% of partners and 19% of equity partners.


This is concerning for ambitious women, of course, but according to a 2016 study from the University of California Davis, it should be a big worry for business owners, too! The study found that companies with at least some women in top leadership positions significantly outperformed companies with predominantly male leadership. As Forbes summarized, “According to experts, the longer we take to close employment gender gaps, the longer that trillions of dollars — and our country’s future workforce — will be left at stake, too.”


UC Davis surveyed 400 of the biggest public companies headquartered in California. Surveyors tallied up the women on these companies’ leadership teams and compared their median returns on assets and equity. The results were eye-opening: The 25 companies with the most female executives and board members had overall returns at least 74% higher than the 400 companies overall. Specifically, their median return on assets was more than double that of the rest of the pool, and their median return on equity was over 75% higher.


This study wasn’t an outlier. According to Forbes, the McKinsey Global Institute found that “if every country could narrow its gender gap at the same historical rate as the fastest-improving nation in its regional peer group, the world could add $12 trillion to its annual gross domestic product by 2025,” and the Credit Suisse Research Institute reported that the more women a company has on its leadership team, the greater its excess returns are for shareholders.


So, what is the secret sauce that makes women in leadership so successful? No one knows for sure, but Inc. Magazine speculates that women have an edge when it comes to emotional intelligence, problem-solving, and trust-building. Whatever the root cause, the results speak for themselves:


It pays to have women on your team.


P.S. A team filled with amazing women makes for a better business, that's been my experience. While making a planning guide for business leaders to migrate safely to the cloud, I immediately got Crystal involved. Her input and assistance made me feel smarter. Check it out! Click on the image below to get started.



12 views