Fostering Gender Diversity for a Thriving Future

It's no secret that gender diversity in leadership is not just a moral imperative; it's also a driving force behind a company's profitability. Let's explore how gender diversity and profitability intersect, examining both progress and barriers in the journey towards a more equitable corporate world.

A 2022 mentoring impact report offers compelling insights. In 2020, Fortune 500 companies faced an average year-on-year profit decrease of -59%. However, a striking revelation emerges when considering the 41 Fortune 500 companies with women CEOs and mentoring programs. They bucked the trend, enjoying an impressive +13% year-on-year profit growth, despite the global recession triggered by the COVID-19 pandemic. In contrast, companies with mentoring programs but without a women CEO closely aligned with the average experienced an average profit decline of 56%.

59% decrease: average year-on-year profit change for Fortune 500 companies 13% increase: year-on-year profit growth for 41 Fortune 500 companies with both women CEOs and mentoring programs.

These numbers make a strong case, but progress towards gender diversity in leadership remains a gradual process.

Recent statistics indicate that gender diversity is gaining traction, albeit at a measured pace. A report examining CEO appointments in 25 global markets found that women comprised 13% of new CEO appointments between July 2021 and June 2022, a notable increase from 11% in 2021 and 9% in 2020. While this demonstrates the impact of initiatives to improve gender diversity at the C-suite level, there are variations across regions. Europe and Asia Pacific lead the way, with Africa showcasing the highest market diversity (17%). In contrast, the Middle East and Latin America lag behind, with meagre percentages of gender diversity.

In the UK, despite women constituting around 52% of the workforce, their representation in the C-suite remains inadequate, with static growth. Research reveals no increase in the number of women CEOs at FTSE companies between 2016 and 2021. Furthermore, despite the rise in the number of women in leadership positions, 63% of FTSE 100 leadership roles still go to men when they become available. Turnover rates remain slow.

Amid these challenges, progress has been made. The FTSE Women Leaders Review reported that over 40% of FTSE 350 company board directors were women in 2022, achieving the target three years ahead of schedule.

Across industries, gender diversity varies significantly. In 2022, industries with the highest percentage of women CEOs included Travel and Hospitality (14%), Chemicals (12%), Media and Entertainment (11%), and Banking (11%). In contrast, the manufacturing industry has no women CEOs. Technology and Power and utilities have the lowest percentages, with only 2% and 5% women CEOs, respectively. In the staffing industry, 2021 data spanning 2,000 recruiters globally revealed that women make up 65% of the industry but only 35% of C-suite positions.

Despite increasing representation, women face various barriers to accessing C-suite positions. These barriers range from structural challenges, like a lack of women-focused leadership networks, to more subtle biases. Unconscious bias presents a significant hurdle, as men and women often define effective leadership differently. Addressing these biases is crucial for women to advance in leadership roles.

To bolster gender diversity, C-suite support is pivotal. Map out a vision for diversification, secure buy-in from HR and decision-makers, and align strategies.

1. Implement gender-neutral recruitment processes and strive for gender balance. Encourage diverse interview panels, reinforce your commitment to gender diversity, and offer flexible working options. Develop internal mobility programs, providing opportunities for upskilling and reskilling, ensuring women have the best chance to succeed.
2. Identify and combat instances of bias in behaviours and decisions. Executive coaching can help teams recognize and overcome bias, fostering a psychologically safe environment.
3. Combine leadership development and inclusive leadership programs for all genders, aligning them with recruitment and mobility efforts and integrating them into succession planning.

By addressing these barriers, companies can build a talent pipeline that accelerates women's progress into C-suite and other leadership positions, creating a more inclusive and profitable future.