Trend Watch: The Feminization of Leadership Creates Higher ROI.

The feminization of leadership is a trend worth watching.

Women in senior executive positions enhance ROI.

How do you retain your most valuable employees?  How do you recruit top talent?  How do you increase (ROI) return on investment when there is a talent shortage?   What impact is gender diversity having on the bottom line?

I just finished reading, Womenomics, Write You Own Rules for Success by Claire Shipman and Katty Kay.  They had some fascinating insights into the value of female leaders and their contributions to ROI.

If you want your organization to increase its ROI, then you might want to know about recent research done in France. The findings show that companies with more women in management positions did better during 2008 than those with fewer women.  For example, the share price of Hermes rose by 16.8%.  Keep in mind that 55% of the firm’s executives are women.

At Pepperdine University, a nineteen year survey of 215 Fortune 500 companies and took three different measures of profitability:  equity, revenue, and assets.   The companies that had the best records for promoting women outperformed the competition.  These companies beat the industry average by 116% in terms of equity, 46% in terms of revenue, and 41% in terms of assets.  It concludes women are good for profits.

What is the link between gender diversity in the top leadership and U.S. corporate financial performance?  In the late 1990s, Catalyst, an independent research organization, completed a study of 353 of the Fortune 500.  A higher number of women in senior management results in a higher return on equity and a higher total return to shareholders by more than one third. 

In an effort to make their firms more competitive in the global economy, the minister of trade in Norway demanded that 40% of women be on the board of each company.  

If your company wants to make more money, then one solution is to employ more women in senior leadership positions.  It seems women are now the hot commodity in today’s workplace.

What can you do to attract and retain top female talent?   Women place a high value on flexibility because it allows them to more effectively live their dual lives as professional women and as mothers.  To retain these employees, companies are offering alternative work schedules, furloughs, unpaid vacation time, and reduced schedules. 

Flexibility is viewed as a way to keep up morale and avoid mass layoffs.  During harsh economic times, this is a way to cut labor costs.  Yet at the same time, companies are able to accommodate the wishes for flexibility desired by many women.

What will the future bring?  Women earn 57% of bachelor’s degrees in the United States and 58% of all graduate degrees.  In business, women comprise over one third of all graduates.  From 1996 to 2002, the senior ranks of women in Fortune 500 companies grew from 10% to 16%.  This is more than a 50% increase in just six years.  The feminization of leadership is a trend worth watching.

Do you think seeking out women for senior executive positions is a good business strategy?

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