Why your next executive hire should be a woman.

It’s well documented that having women in leadership teams is good for business. Vast amounts of research have been done to show diversity in board composition and executive teams leads to profitability, better social responsibility outcomes, and improved customer experiences. Despite this, business has been slow to change the status quo from male-dominated leadership to embrace the benefits of DEI at the executive table. New research shows when companies do move the bar, all genders in an organisation reap the benefits.

Women executives tend to have less influence than their male peers

While great strides have been achieved in closing the gender gap in leadership, research published in the Harvard Law School Forum on Corporate Governance in 2023 shows men are 2.5 times more likely than women to be executives. When women are well represented, they tend to be in roles that hold far less power and influence. The research is interesting because it provides substantive analysis on gender diversity at the executive level.

The top executive positions occupied by women are: ?

·????????Chief Human Resources Officer – CHRO (67%)

·????????Chief Marketing Officer – CMO (47%)

·????????General Counsel – GC (41%).

In many companies, the CMO is not considered part of the executive team. Only 1% of individuals in the CHRO role aspire to be CEO. Even when women are in executive roles, they’re often not in positions where they can make the most impact. This suggests companies are not receiving long-term advantages from having a diverse executive team, the kind that go far beyond profitability and customer service.

Adding women to the C-suite changes how companies think

Overall, only 25% of C-suite positions are filled by women according to the 2023 Global Gender Gap Report 2023 by the World Economic Forum.

Companies who actively consider hiring women for all roles in their executive search and recruitment activities report widespread improvements in how the company operates.

Transformation with fewer risks

Recent research published in the Harvard Business Review shows women do more than add a new perspective to the C-suite; their presence makes the whole team more open to change. Women are more risk-averse then men. These two qualities combined change how strategic decisions are made.

Women are more collaborative in their approach to problem-solving and have less entrenched views about how executives should think, behave, and make decisions. Overall, executive teams with greater gender diversity embraced transformation while working to reduce the risks associated with it.

More internal capability building

One way the focus on risk manifests itself in diverse executive teams is in a reduction of merger and acquisition (M&A) activity, a high-risk undertaking for companies. Instead of M&As, companies reported an increase in research and development (R&D) investments when more women were in executive positions. This results in new products, services, and homegrown IP, which all lead to increased revenue.

Increased trust throughout the organisation

Employees are more confident they will be treated fairly in a business that has gender diversity in the executive team. Having more women in executive positions also leads employees to believe they have greater projected salary opportunities. This is true for men and women across male- and female-dominated industries.

Getting more women into executive positions

According to McKinsey’s Women in the Workplace 2022 report, there’s plenty that can be done to support a more gender-diverse executive team. To make the workplace attractive for women, leading practice suggests sharing bias reminders before you begin recruitment to ensure there’s no unconscious bias in your hiring decisions. An emerging practice showing promise is having a bias monitor sit in on candidate reviews for hiring decisions.

The most progressive companies are hiring women across all executive positions, including those that are traditionally filled by men. Roles with low representation of women are:

·????????Chief Executive Officer – CEO (9%)

·????????Chief Operating Officer – COO (10%)

·????????Chief Financial Officer – CFO (18%)

·????????Chief Information/Technical Officer – CIO/CTO (21%)

Getting help with your next executive hire

Women are ready to step into executive leadership roles. They are looking for companies who understand the value they bring to the executive team and the wider organisation. DSY believes increasing women in positions of power and influence in the executive team and the board leads to better outcomes for employees and all stakeholders. We recommend evaluating the diversity in your executive team and on your board to consider how hiring a woman for your next executive position can transform your company.

Contact us?to find out how you can add more qualified women and diversity candidates into your next executive selection process.