Why Companies Need Women in Leadership
As we celebrate the accomplishments of Women in Business in this month’s élite Magazine, it is important to note that the battle for equality in the workplace rages on. The good news is that more women than ever are head of Fortune 500 companies. However, with the total number of female CEOs now reaching 34 (up from 24 the year prior) it is still a disproportionately small number, at six percent. Great strides have been made, but we still have a long way to go, baby.
LeanIn.org released key findings from five years’ worth of data from their research on women in the workplace. According to their study, the so-called glass ceiling isn’t the real issue. Instead, the challenge many women face is accessibility to the ladder in the first place, causing female employees to get stuck in entry-level positions. The same research also found that women are less likely to be hired and promoted to manager, women hold only 38% of manager-level positions, and two-thirds of companies fail to set gender representation targets for first-level manager roles. In addition, women of color face even more barriers to advancement due to racial bias in the workplace.
Diversity an important ingredient to success
There is strong evidence that companies that have a diverse leadership are more likely to be successful. According to a 2015 study by McKinsey & Company, companies with higher gender diversity among executives are 21% more likely to experience higher than average profits. The same research showed that executive teams with more cultural and ethnic diversity were 33% more likely to see increased profits. A recent study from Korn Ferry and the Rockefeller Foundation found that companies that have both gender diversity and leadership that is invested in fostering an inclusive environment, increased their innovation and overall performance.
A controversial new California law mandates gender diversity on boards
By the end of the year, publicly traded companies in the State of California will be required to have at least one female director, depending on the size of the board, in order to comply with Senate Bill 826 also known as Women on Boards. When the bill was signed into law by former Governor Jerry Brown in 2018, 25% of companies in California didn’t have a single woman on their boards. To date, many companies in the state have still not met this requirement.
All businesses should be proactive about encouraging diversity in their boards and in their teams. Employees who feel they have equal opportunity to advance are more likely to have higher job satisfaction and view the company as a great place to work, often referring their friends and connections. Diversity propels innovation, productivity, and profitability. Businesses that take action to become more inclusive workplaces will not only have happier and more successful employees, they will also increase their bottom line. This is a win-win for everyone!
The Santa Clarita Valley Economic Development Corporation (SCVEDC) is a unique private / public partnership representing the united effort of regional industry and government leaders. SCVEDC utilizes an integrated approach to attracting, retaining and expanding a diversity of businesses in the Santa Clarita Valley, especially those in key industry clusters, by offering competitive business services and other resources. Learn more at www.scvedc.org.
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