Women have been fighting for gender parity for a very long time and researchers have discovered a very telling argument in favour of this. Research conducted by the Peterson Institute for International Economics and EY looked at women in “C-suite” or leadership positions and found that having more women in these positions increases a company’s profitability. 21,980 global, publicly traded companies in 91 countries across various industries and sectors were examined and their net profit margin was found to be higher by 6% when there were more women as CEOs, board members or in other key positions.
Making the case for gender parity
More women in the leadership positions increases profitability
It is a worldwide phenomenon that women are paid less than men. Various reasons are put forward to explain away this historical injustice. This study now furthers the case for gender parity in pay structures not only on the principles of fairness and equity but also to bring about better business results. In short, a woman earns a company more money than does a man; what then is the excuse to not pay her the same!
Earlier studies have had similar results: according to a McKinsey & Co study, European firms with the highest proportion of women in leadership positions increased stock value 64% over two years, compared with an average of 47%.
Why are women better at improving profitability?
Increasing business profitability
One reason for improved profitability for companies with women in leadership positions is the fact that women instinctively understand consumer markets better than men. In general, it is women that manage households, make everyday purchases and manage family budgets. They are able to carry forward this financial prudence into their professional life as well.
Another reason is the fact that gender diversity in the workplace results in smarter decisions following more vigorous debate among colleagues. It is also seen that women typically display a different, more fruitful style of leadership. The financial decisions women take may be less risky and more sensible than those made by men and their testosterone-addled thought processes; that can and frequently do lead to financial crises. Women also bring a more diverse set of skills to the table than do men; another reason that perhaps contributes to better decision making.
The corporate powers-that-be would do well to heed these facts – in the interests of a healthier bottom line if not social justice and fairness; which hitherto has not proved too persuasive.
