Why Female Leadership is a Business Imperative

Women supplement economic growth and businesses of a country. Yet, the reality is that many have to be constantly reminded of this fact through research data and other means. With women making up half of consumers and talent resources worldwide, it should be apparent that they have an equal role in the economy and decision-making process. 

In today’s article, we discuss the importance of women leaders in business.

According to a study by McKinsey Global Institute, supporting women’s equality could increase global economic growth by $12 trillion in just a decade, which is an 11% rise, compared to the current business scenario. A study by Korn Ferry and the National University of Singapore revealed that organisations with more women as board members tend to earn more profit. The study further showed that those with at least 10% women directors delivered 14.9% Return on Equity (ROE) while companies without women directors delivered only 12.6% ROE.

Yet, the age-old habit of exclusivity in assigning economic roles continues. The participation of women in labor markets and their presence in lead positions remain to be limited. Even after taking into account the fact that many women work for the benefit of their family in whole rather than solely for an income, the lack of women in the workplace is not reflective of their educational and occupational qualification. 

The case for involving women in key decision-making positions in business is apparent but many companies fail to realize the value. The value of diversity of knowledge is understood in general, which explains why varied opinions are sought in organisational decision-making, except – women are usually not invited to the table. Such narrow spectrum of thinking and easy consensus often result in sub-optimal business outcomes, which may also be catastrophic, in some events. 

Most of the organisations view women as mainly consumers and not valuable resources for leadership and innovation. Companies generally purchase market research about what women want instead of actually asking women to decide what to make, how to monetize that, and what to make next. 
It is thus crucial to acknowledge that women make an important difference to the quality of decision-making, especially at board level. Simply by disrupting the consensus, women ensure greater scrutiny of choices and outcomes. This is reflected in the improved business performance and stability. Moreover, women tend to ensure greater prudence, as they have a vested interest in the company and more likely to be concerned about preserving its status. 

To fully utilize the potential of gender diversity in advancing business prospects, it is crucial to also eradicate the deeply entrenched segregation of sectors and functions according to one’s gender. Majority of educated women are channeled into industries such as education, healthcare, and banking, NGOs, and civil services. Not many women are leading the manufacturing, infrastructure, and IT industries which are predominantly male-dominated. This gender segregation inflicts severe costs on businesses as it deprives all sectors and corporate functions of diverse talent pools. 

As such, companies need to take a cue and prepare for greater gender diversity from shop floors to boardrooms. They are obligated to their shareholders to produce the best business outcomes and women can surely help them to achieve that.


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