These Three Women Demonstrate How Gender Diversity Works

April 2, 2019
Men and women in workplace

Reams of recent research underscore the critical role women play in business, and the dramatic difference they can make to the bottom line. A study by the Peterson Institute for International Economics and professional services firm EY shows a significant correlation between female leadership and company profitability. In a similar vein, a report published by Nordea—the largest bank in the Nordic region and one of the largest in Europe—suggests investing in women at the C-level pays off. Its 2017 analysis of 11,000 publicly traded companies across the globe concludes “companies run by women perform far better than the market.”

The business case for gender diversity is further reinforced by new findings from management consulting firm McKinsey released in January. Delivering Through Diversity reaffirms the global relevance of the link between diversity—defined as a greater proportion of women and a more mixed ethnic and cultural composition in the leadership of large companies—and company financial outperformance.

But firms that embrace gender diversity aren’t just much more likely to have high financial returns. They also have what it takes to move the needle on innovation. Research released last year by the University of Arizona Eller College of Management shows that diverse companies are also more creative. In an interview with CNBC, Joe Carella, assistant dean at the college, explained that an analysis of Fortune 500 companies revealed organizations with women in top management roles also experienced what he called “innovation intensity”—a power and passion that produced measurable results. Specifically, gender-diverse teams produced an average of 20% more patents than teams with male leaders.

Photo courtesy Pixabay.