Greater representation for women in the U.S. workforce is simply good business, yet unequal representation and toxic cultures that close women off from leadership opportunities remain. Quotas and recruitment initiatives alone are not enough to fix this — companies need to pay closer attention to the positive impact that gender diversity can have on performance and commit to rooting out biases on an institutional level.
Women are woefully underrepresented in leadership roles in business, even though there is no shortage of educated, qualified women to fill such roles. As of January 2018, out of the entire list of individuals leading Fortune 500 companies, just 5% were female. In contrast, recent data about higher education shows that women consistently earn the majority of doctoral degrees and outnumber men in graduate school overall. This disconnect suggests there must be something inherent and systematic in the American workplace that is preventing women from reaching major leadership positions.
Addressing this gap is not only the right thing to do; it’s also beneficial for businesses. Research suggests a remarkable correlation between gender diversity and company profitability — the Peterson Institute for International Economics found that for profitable companies, increasing the share of female leadership from zero to 30% is associated with a 15% increase in net revenue margin.
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Moreover, gender diversity can help ensure that a company considers a wider range of perspectives when making major business decisions. Being able to tap into varied viewpoints and background experiences when assessing product launches, hiring decisions, annual goals, and more can ensure that business leaders consider all potential outcomes before settling on the most strategic path.
Even as we consider these benefits, it’s imperative to remember that actions speak louder than words. While it’s important to recognize and talk about the advantages of women’s perspectives in business, such rhetoric is ultimately ineffective without an unbiased culture to back it up.
For example, it’s still far too common for business to be conducted in ways that promote the objectification of women and fail to foster inclusivity — just look at the recent bitcoin BTCUSD, +0.13% conference that hosted a networking event at a strip club. Moreover, what ordinarily would be considered a non-oppressive space can become harmful to women, for example, when companies hire models for office holiday parties. Practices like these demonstrate a striking lack of respect for women and set a company up to alienate a massive portion of its employees as well as its target audience.
Creating a supportive culture isn’t just about avoiding negative practices; it also necessitates implementing positive practices. For example, setting up women’s mentoring or networking events can be a step in the right direction. Such events are most effective if they are created in addition to existing spaces for networking organization- or industry-wide, so that women’s professional advancement opportunities are not limited to women-only events.
Additionally, family leave policies also present an opportunity to support diversity and choice through a positive culture. While both men and women make career choices based on their family dynamic, Pew Research Center data shows that women more often make compromises with their career when family responsibilities arise. As such, strong family leave policies can bolster female employees’ abilities to balance familial and professional duties.
There’s no question that women’s rights have advanced significantly over the course of history, but we still have a long way to go when it comes to eradicating the biases and systemic obstacles that prevent women from gaining full equality in the workplace. This is not just a women’s issue, and it’s not just a men’s issue — it’s a human issue.
The facts speak for themselves: The business community as a whole must understand why expanding gender diversity within leadership roles is the right thing to do and is vital for the bottom line. Each one of us has the power to move the needle on diversity. While national and international campaigns provide an opportunity for us to highlight past progress and foster the cultural shifts we wish to see, we must seek out true diversity every day if we are to achieve lasting change.
Natalie Wolfsen is chief solutions officer at AssetMark, Inc. The views expressed here are her own.