In January 2023, over 10% of Fortune 500 companies had women leaders. It was the first time the number reached double digits. Women have made significant strides towards gender parity in the workplace, but there is still a significant gender gap in leadership roles. Women are vastly underrepresented in executive positions, despite being equally or more qualified than their male counterparts.
The benefits of having more women in leadership positions are clear. Research has consistently shown that companies with diverse leadership teams perform better financially. McKinsey & Company found that companies in the top quartile for gender diversity are 21% more likely to experience above-average profitability than companies in the bottom quartile. Similarly, a study by the Peterson Institute for International Economics found that companies with at least 30% female leaders have net profit margins that are 6 percentage points higher than companies with no female leaders.
Here’s why women can be game changers:
Women offer fresh perspective
Men and women have different experiences, views, and perspectives. When you open your boardrooms to women, you allow a fresh approach to various issues that helps navigate the changing world better.
Women are natural leaders
A Harvard Business Review study measured the leadership skills of men and women almost four years ago. They used over 1,000 360-degree peer reviews and measured 19 parameters. Women scored higher than men on 17 different parameters. Women were found to be more resilient, practiced far more self-development, and took more initiative than their male counterparts – all of which make them better leaders.
Women lead with empathy
Women are more empathetic. They understand that every individual uniquely observes the world and mostly refrain from passing judgement. Women leaders can connect with their teams and openly engage with them about their differing views and opinions. Leading with empathy creates safe spaces where team members feel confident enough to express their viewpoints. An empathetic approach facilitates the exchange of ideas, which leads to the company’s success.
Women communicate efficiently
We often hear jokes about how much women talk. At work, the ability to communicate and collaborate with colleagues allows for meaningful dialogue. Open communication with peers, bosses, and team members increases clarity about roles and responsibilities and enhances the company’s performance.
Women are good crisis managers
Women possess leadership skills that become invaluable in emergencies. During a crisis, they rely on their communication skills to effectively outline tasks and rewards and inspire the team to work together. Women leaders also use a more collaborative approach to decision-making, allowing them to rely on the strengths of various high-level employees to make better decisions in a crisis.
Women can bridge the gender pay gap
Co-founder & COO,
RING & Kissht
Crucially, women leaders are the only ones who can bridge the gender pay gap. When they rise to leadership positions, they can ensure that every team member gets appreciated equally. Women leaders are more likely to value women employees for their hard work, encouraging them to stay in the workforce and climb the corporate ladder.
Across the world, women continue to take on the role of primary caregivers at home. Working moms, especially, struggle to prioritise and define what work-life balance looks like to them. When more women take up leadership positions, they can create environments where women feel valued while enjoying the required flexibility to fulfil their duties at work and home. Empathetic leaders who encounter similar situations while rising through the ranks are best suited to building a workplace where men and women enjoy equal opportunities to thrive.