In 2016, only 20.2% of board members at Fortune 500 companies were women. According to Catalyst, a non-profit organization, Fortune 500 companies with more female board members demonstrate better financial performance than those with fewer women board members.
Catalyst focused on three key measurement indicators in its research: (1) return on sales; (2) return on equity; and (3) return on investment; The results proved that a higher proportion of female board members has a positive correlation with all three indicators. Development Dimensions International (DDI), a global management company, conducted a similar survey which supported the Catalyst findings and indicated substantially better performance at businesses where the overwhelming majority of board members were women.
Though the proportion of women in leadership roles is increasing steadily, the pace of the correction remains too low to achieve gender equality in the boardroom within the next few decades. Recent statistics indicate that only 24% of senior roles are held by women globally, representing a mere 3% increase in the seven years since 2011.
The representation of women in the boardroom can be significantly increased by implementing five key strategies to bring more balance between genders to senior leadership roles:
Organizations benefit greatly by increasing the representation of women in leadership positions. More diverse problem-solving capabilities and improved financial performance are just a few of many advantages attributable to greater participation of women in leadership roles. The challenges facing humanity require diverse skills and innovative leaders to solve. Women bring unique skills and intimate knowledge of the largest demographic. Women leaders help balance the perspective from the helm to drive innovative solutions and create lasting value. Every company has a fiduciary duty to ensure men and women are equally represented throughout their ranks and especially within the executive team.
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Mr Prashant Tandon is the founder and CEO of 1mg, India's largest digital health platform. As a visionary healthcare entrepreneur, Tandon has been listed as one of India's top 40 most influential people under 40 years of age (Economic Times: 40 under 40).