The Competitive Edge of Female Leadership

Leadership, diversity, and inclusion are all buzzwords of our time. However, when it comes to female leadership specifically, some people still don’t understand why businesses should make an effort to include women in the Boardroom and other decision-making roles.

To harness gender diversity in their organisation, many business leaders will ask women to pursue higher management positions. Yet they may not know that only 18 women are among the CEOs of Australia’s largest 300 companies, or 6.2%, according to the 2021 Chief Executive Women Senior Executive Census. Out of 23 CEO appointments, only one was a woman in the reporting period, according to CEW, calling for gender balance targets for executive leadership roles.

Now consider these statistics from The Australian Institute of Directors: The latest percentage of women on ASX 200 Boards is 34.2%. Women have comprised 41.8% of 2021 appointments on ASX 200 Boards overall.

The good news is that there are no Boards in the ASX 200 without women. Unfortunately, the same cannot be said for the latest percentage of women on ASX 300 Boards, which is 32.6% and the latest percentage of women on ASX All Ordinaries, which is 28.7%.

With these stark statistics, it’s clear that businesses need to continue to place a higher emphasis on including female leadership in the Boardroom if they want to remain competitive in today’s marketplace. Businesses may think that women aren’t fit to lead or are less capable than men in leadership roles, but the fact of the matter is that there are many advantages to having female Board members.

77% of Millennial Men Say They Would Not Work for a Company Without Women Leaders

A recent study conducted by Ernst & Young revealed that Millennial men are drawn to businesses that have female representation in senior management. According to both male and female respondents, a greater presence of women can lead to more effective leadership, innovation, and risk-taking in an organisation. Companies that employ strong female leaders gain an advantage over their competition. It is especially true for fast-growing startups; over three-quarters (77%) of male Millennials say they would not work for a company without at least one woman on its Board.

In contrast, only about half (52%) of males aged 40–59 said they would refuse employment at a business with no female executives or directors. Overall, 30% per cent of Millennial men surveyed said that having women present at executive levels helps them feel as though there’s a culture of inclusion within their workplace—compared to just 16% for all other generations combined.

8 out of 10 Males Support More Female Leaders

Women’s low representation in corporate Boardrooms costs businesses (and everyone else) billions. But What Can Be Done?

Diversity, it turns out, is a business imperative. Eighty-five per cent of male executives believe that diversity strengthens their companies. Women account for half of all purchasing decisions. Research shows that women – as well as minorities and LGBT individuals – are more likely to buy from businesses with leaders who reflect them, too.

The Numbers Don’t Lie.

People want to work for, support, and buy from organisations led by people like themselves. Gender-diverse teams are more creative and correlate with performance outcomes like profitability and lower staff turnover; female Board members correlate with stronger financial results and higher valuations. There is nothing but upside here.

What Makes Having Female Board Members Worthwhile?

Having women on a Board is always good for business. According to a study by McKinsey & Company, companies with at least three female Board members are 15% more likely to outperform their peers in profitability. The reason? Women bring different perspectives and experiences, enhancing decision-making abilities and improving workplace dynamics. Women work better when working alongside other women, they challenge each other less, they listen more carefully and they’re more likely to build consensus around shared goals.

It also reduces conflict because men and women can approach problems from different perspectives. A recent Catalyst study found that top-performing teams had 35% more gender diversity than average ones, while teams with no women at all were 13 times more likely to lose money than their gender-diverse counterparts.

Studies also continue to show that people favour information from individuals like themselves – and since there aren’t many women CEOs out there (just 6.2%), having some on your team makes it easier for everybody else to adjust their own cultural and situational biases accordingly.

It’s No Secret That Diversity Is Good For Business

Businesses with women in leadership roles are more productive, innovative and profitable, but until recently, companies have done little to capitalise on these benefits, particularly at Board level. Recent research has suggested that if you increase female representation on Boards from 10% to 30%, corporate profits can rise by 60%.

With so many benefits, there’s no question why business leaders are opening their minds to the competitive edge that female leadership brings to their organisations.