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If The World is Diverse, Why Aren’t Organizations And Decision Making Bodies Too?

More gender diversity in corporate leadership does not automatically translate into more profits, but when a company commits to diverse leadership, it starts to become more successful and the benefits will show.


For centuries the world has experienced many cultural prejudices against the female gender; it was thought that a woman could not have the same intellectual and professional capacity as a man, that women did not choose to aspire to high positions and voluntarily stepped aside, leaving the way open for the male sector.

Even in the 21st century, there are still unconscious prejudices that stand in the way of the promotion of women within some organizations. These prejudices converge in the same thing: that women cannot occupy high-level positions or play an important role.

It is time for decision-makers and voters to change hiring standards to ensure that women are seriously considered.

It is clear that unconscious bias leads to the view that women should not hold senior positions or play important roles; a man is automatically given the go-ahead even when there is an equally or more competent woman next to him. Leaders need to look closely at what stands in the way of promoting women in their organizations. Surveys show that women in leadership positions are perceived to be as effective - or more so - than men, and are even rated as "outstanding" in areas such as initiative, resilience, self-development, results orientation, integrity, and honesty.

According to a 360-degree analysis recently conducted by a well-known company, women are perceived by their bosses - even if they are male - as slightly more effective than men at all hierarchical levels and in practically all functional areas of the organization. In the analysis, women outperformed men in 17 of the 19 capabilities that differentiate excellent leaders from intermediate or mediocre ones.

Worryingly, however, the percentage of women in corporate leadership positions has remained stable: only 5% of CEOs in the Fortune 500 and 2% of the Standard & Poor's 500 are women. This underrepresentation of women could be due to the stereotype that the female gender is not given an interest in "hard sciences."

One factor to consider is age: women under the age of 25 are likely to be much more competent than they think they are, while men in the same age range may assume, out of overconfidence, that they are more competent even if this is not entirely true. At the age of 40, the confidence indexes of men and women balance out, and as they get older, confidence tends to increase in both; but after the age of 60, male confidence decreases, while female confidence increases. This data comes from a study that included 40,184 men and 22,600 women and measures men's and women's overall effectiveness ratings on 49 unique behaviors that predict a leader's effectiveness.

A webinar was recently organized with a panel of businesswomen at different stages of their careers to discuss these issues. Among the comments that emerged were the following:

  • Emotional intelligence may prove to be a key competitive advantage for women in business. A 2016 study found that women outperform men in 11 of 12 key emotional intelligence competencies, including emotional self-awareness, empathy, conflict management, adaptability, and teamwork.
  • Women account for 85% of consumer purchases, yet only 11% of creative advertising directors are women. Considering the power of the female consumer, it is clear that women are best placed to provide valuable consumer insight.
  • While some industries show a trend towards an increasing female workforce, sectors such as finance, engineering, and technology still tend to be heavily dominated by men.
  • Men and women inevitably have different experiences and backgrounds, which shape their approach to business. Challenging each other and collaborating with people who think differently can foster creativity and promote innovative ideas that move organizations forward.

In one way or another, and despite prejudices, studies, and statistics, the business world has transformed in recent years. Today, it is no longer uncommon to see a woman in charge of a high-level management position or running her own business.

While it is true that there are still some gaps for male executives, more and more organizations have become aware of the benefits and advantages offered by the female sector in business. Examples of this are IBM, General Motors, or Mondelēz International, which have appointed women as CEOs. This means that the relationship between diversity in executive teams and the likelihood of superior financial results has been strengthening over time.

The best part is that this trend appears to be increasing. There are now more women at the helm of Fortune 500 companies than at any time in the list's 63-year history. That speaks not only to a concern for gender equity but to a business vision that seeks to succeed.

But for an increasing number of women, the fastest way to the top is through their own business. In the United States, women-owned businesses have increased by 74% in the last 20 years. Women starting businesses allows them not only to be their bosses and pay their salary but to define the way they work and how they balance it with family life and an opportunity to recruit other like-minded women, fostering new generations of women in leadership positions.

As women have “infiltrated” the sphere of senior management, whether as executives in a large corporation or as owners of their own business, it has become clear that they offer a different perspective and a way of working and managing people that can produce the same or better successful results than men.

An analysis, called Diversity Matters, examined the correlation between financial metrics and the composition of senior management and boards of directors in 366 public companies in Canada, Latin America, the United Kingdom, and the United States. This research examined parameters such as financial performance, top management composition, and board integration.

Among the outstanding results, it was found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial performance above the national average for their sector, and for gender diversity, they are 15% more likely to have such performance. In the United States, for every 10% increase in racial and ethnic diversity in the management team, earnings before interest and taxes (EBIT) increased by 0.8%. In contrast, in the United Kingdom, for every 10% increase in gender diversity, EBIT increased by 3.5%.

Another study by a leading consulting firm found that companies with more than 30 percent female executives were more likely to outperform those between 10 and 30 percent. In turn, these companies were more likely to outperform those with fewer or no female executives. In terms of how progress has been made on diversity, the study reveals that the representation of women on executive teams has quadrupled in the last five years. An organization with 30 percent female leaders could add as much as six percentage points to its net margin.

The reality of this progress in gender equity is shown in a recent report on the results of a survey of nearly 22,000 publicly traded companies in 91 countries around the world. The top five countries with the most women on boards of directors are Norway (40%), Latvia (25%), Italy (24%), Finland (23%), and Bulgaria (22%).

It seems that diversity is becoming a competitive differentiator. This is probably why, for many forward-thinking organizations, gender equality is becoming a cultural issue reflected in an equal representation of women in boardrooms so that diversity, inclusion, and gender equality become policy and are integrated into business strategy.

But the growth of women's presence has not been limited to the business sphere; it has extended to the world of politics, although they are still underrepresented at all levels of decision-making around the world and gender parity in political life is still far from being achieved.

As of September 1, 2021, 26 women serve as Heads of State and/or Government in 24 countries. Only 10 countries have a woman as Head of State, and 13 countries have a woman as Head of Government. Only 21% of government ministers are women, and only 14 countries have achieved 50% or more women in their cabinets.

In Latin America, the Caribbean, Europe, and North America, women hold more than 30% of parliamentary seats. In North Africa, West Asia, and Oceania, there are less than 17% women in national parliaments and female representation is lowest in the Pacific Island States where women hold 6% of seats.

However, there is established and growing evidence that women's leadership in political decision-making processes is better. For example, research on panchayats (local councils) in India found that the number of drinking water projects in areas with women-led councils was 62% higher than in those with male-led councils, and in Norway, a direct causal relationship was found between the presence of women on municipal councils and child care coverage.

Undoubtedly a well-known woman in the world of politics is Angela Merkel, Chancellor of Germany from 2005 to 2021, after which she left the political stage to great acclaim. Like her, New Zealand's Jacinda Ardern and Taiwan's Tsai Ing-wen received gold stars for their respective responses to the pandemic, while Sviatlana Tsikhanouskaya, the Belarusian opposition leader who from exile is stirring the waters against Putin, emerged as the war for democracy in her country.

And while COVID endures, it is clear that 2022 will be fraught with immensely complicated political issues for all countries, and surely many female leaders will be at the forefront of efforts to address complex national and international challenges in the coming months. In that regard, women such as Britain's Liz Truss, Minister for Women and Equality who has been proposed as a possible successor to Prime Minister Boris Johnson and could match or exceed the role played by Margaret Thatcher; France's Valerie Pécresse, President of the Regional Council of Ile-de-France and who on December 4, 2021, was elected candidate for France's 2022 presidential elections, or Israel's Merav Michaeli, Israel's Minister of Transport, National Infrastructure and Road Safety and who is being counted on to rebuild the liberal party of Golda Meir and Yizhak Rabin, which has been in ruins.

Other women around the world demonstrate their political leadership by working across party lines through women's parliamentary caucuses - even in the most politically combative environments - and championing gender equality issues such as the elimination of gender-based violence, parental leave, and childcare, pensions, gender equality laws and electoral reform.

Another bias against the female gender is a traditional tendency to encourage women to act like men, although not all men are good leaders or very competent in their area of work. Why not change the perspective? Why not ask men in leadership positions to adopt some leadership behaviors generally found in women? Some of these attitudes could be:

  • Know one's limitations.- Although women are not as insecure as they are portrayed in self-help literature, it is true that, in general, they are less self-confident than men. This is not a bad thing as it allows them to understand how people see them and gives them the ability to spot the differences between where they are and where they want to be. People who see themselves more critically than others are better able to prepare themselves to grow. Those are the women.
  • Motivate through transformation.- Academic studies show that women are more likely than men to lead through inspiration, motivating people to mean and purpose. Since transformational leadership is linked to higher levels of team engagement, performance, and productivity, it is a critical avenue for improving leaders' performance.
  • Not commanding, but empathizing.- Women are often labeled as too kind and nurturing and therefore unable to be leaders; however, the idea that someone who is not kind and nurturing can lead effectively is at odds with reality. Twenty-first-century leadership requires making an emotional connection with followers, as women do more naturally.
  • Focus on scaling team members.- It has been shown that women leaders are more likely to coach, mentor, and develop their direct subordinates than male leaders. They are true talent agents, using feedback and direction to help people grow.
  • Not saying "I am humble" but being humble.- We have been asking for humble leaders for 20 years, but we keep gravitating towards those who are overconfident and narcissistic (usually not women). There are well-established gender differences in humility, and they favor women. Not all women are humble, of course, but selecting leaders based on humility would result in more female leaders than males. Humility is fundamentally a feminine trait. It is also an essential trait for being a great leader.
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It is dangerous to assume that elevating women displace or disadvantages men. It should not be forgotten that leadership traits such as confidence and assertiveness are not the exclusive province of men, just as compassion and empathy are not only present in women. All of these traits play a role in effective leadership in a company, so it is necessary to stop pigeonholing or prejudging people and allow them to complement each other, regardless of gender identity.

To break down those barriers that have been present for decades, it is necessary to learn what it means to embrace diversity in leadership: to create an environment where both sides of the equation are not pitted against each other, but complement each other; where women and their input are not simply tolerated, but valued on their merit; and to end equity criteria based on meeting a policy or achieving a gender quota.

As women have infiltrated the management sphere, it has become clear that they offer a different perspective and a way of working and managing people that can produce the same or better successful results.

So it's not just about what you teach them, it's also about how they are going to learn those lessons. Don't just preach, but act accordingly. Diversity and inclusion should drive all decisions and should be centered in your processes.

Gender equity and more women in leadership positions should be seen as a long-term investment. Companies should maintain a zero-tolerance policy towards discriminatory behavior, such as bullying and harassment, and actively help managers and staff identify and address microaggressions. They should also set standards for open and welcoming behavior, and ask managers and employees to evaluate each other on how they are meeting that standard. They need to build a culture in which all employees feel they can bring their whole selves to work.

Let's be clear: More gender diversity in corporate leadership does not automatically translate into more profits, but when a company commits to diverse leadership, it starts to become more successful and the benefits will show.

Finally: If you had to make a decision to hire or promote an executive and you have a choice of a highly qualified woman and an equally qualified man who would you choose and why (forgetting equity policies)?

What would you answer if you were asked why there are more male than female managers in the company where you work?

Would you say that your workplace has made sufficient progress on gender equity?

How many female executives do you remember in various companies?

Do you think enough women are being helped to find their way into leadership positions to improve companies?

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Pedro helps individuals & organisations thrive. He simplifies complexity, identifies inefficiencies, connects dots & imagines ideas that drive meaningful outcomes.