In today’s rapidly evolving corporate landscape, the need for leadership that is not only forward-thinking but also socially responsible has never been more pronounced. As businesses endeavour to navigate an increasingly complex world, women are making significant strides in reshaping this corporate landscape and its approach to diversity, sustainability, and overall commercial success.
Executive leadership is undergoing a transformation in gender ratios. The pace of change does not yet match ambition though, with the UN’s predictions around its 2030 Sustainable Development Goals for gender equity, it will take a further 140 years to achieve equal leadership representation in the workplace at current progress rates. However, women are undeterred in continuing to break barriers and rise to leadership positions, with even this slow shift still having a profound wider impact. It’s now widely recognised that companies capable of harnessing diverse perspectives foster better decision-making, stronger client and consumer engagement, and improved profitability as well as improved wider social outcomes beyond the bottom line.
A Force for Positive Social Change
One of the compelling benefits of women occupying leadership roles for instance, is the inclination for championing sustainability. There have been several studies that suggest companies with strong female leadership at the executive level correlate with improved ESG performance, particularly in emerging markets. With advancing legislature in the UK surrounding ESG measures, and clients and consumers being increasingly savvy in holding businesses to account, ESG is a necessity in operations, reputation and profitability for companies to succeed in a world actively grappling with environmental challenges.
Female leaders are also setting the pace for socially conscious initiatives, by pushing towards greener investments, or Gender Lens Investing, for instance. There are strong correlations between female leadership and increased advocacy for ethical investing, in recognition that responsible investment practices both align with sustainability values and can reduce financial risks in the longer term. Likewise, women in leadership positions are often the driving force behind philanthropic endeavours. Many female executives are actively involved in CSR programmes, channelling corporate resources towards wider socially beneficial projects such as education, healthcare, and poverty alleviation.
Diversity Breeds Innovation and Risk Mitigation
Women in leadership are not just worth celebrating for their impact on conventional socially conscious behaviours though. The introduction of women into leadership roles can bring a diversity of thought and experience that likewise promotes stronger innovation. In a recent report on ‘Gender Diversity and Corporate Performance’, Credit Suisse found that companies with women in senior management positions tended to be more innovative. They noted that these companies on average had higher returns on equity, with innovation typically a key driver of financial performance. Likewise, Morgan Stanley’s Holistic Equal Representation Score (HERS) gender diversity framework recently indicated that firms with greater gender diversity (of 1,875 firms surveyed worldwide) celebrated better share price performance than less gender-diverse firms (those with lower HERS rankings) by margins of 1.6% in 2022, in line with 2021 performance and the pre-COVID long-term.
Whilst there are a multitude of factors that contribute to innovation, at the very base level, increased female representation in business leads to challenging the status quo, improving creativity in problem solving, and reduction of myopic approaches or ‘groupthink’. When diverse voices are part of decision-making processes, all industries can become better equipped to identify and address emerging market trends and opportunities, as well as deal with volatile markets, two crucial elements of maintaining a competitive edge.
Female leaders also often excel at risk management, a particularly valuable asset when managing financial risks is paramount, such as in times of economic uncertainty. As we continue to navigate the long shadow cast by Covid, and the ensuing cost of living crisis in the UK, women leaders are thus well equipped to guide their organisations through turbulent waters, making sound decisions that can protect shareholder value and employee well-being, as well as wider social frameworks.
A Catalyst for Equal Pay and Gender Equality
Women in corporate leadership positions are thus not just advocating for gender equality within their own organisations; they are also driving change on a broader scale. By occupying influential positions, they can serve as role models for other women aspiring to leadership roles cross-sectorally.
One of the other significant contributions of female leadership is improvement in commitment to equal pay. In April of this year, gender pay gap reporting came into effect in the UK, with any business of over 250 employees having to provide a ‘snapshot date’ gender pay gap report. Sadly the most recent reports suggest that the needle has not yet moved much on pay parity – with the most recently available data (2021-2022) showing maintenance of the median pay gap between men and women at 9.4%, unchanged from the first year of reporting (2017 – 2018). With some way to go towards pay parity in larger business entities though, enhancing female representation at more senior levels is likely to be an important factor in providing both personal and systemic perspective on the need for enhanced scrutiny into pay equality.
Conclusion
As corporations continue to evolve, the positive influence of women in executive leadership roles becomes increasingly evident. Their commitment to sustainability, their innovative thinking, and their dedication to broader diversity and gender equality aims are reshaping the corporate and wider social landscape for the better. Embracing female leadership is therefore a matter of both ethical and strategic imperative. Companies that recognise the immense value women bring to the table are better positioned to thrive in volatile markets, and in an ever-changing world.
At Partner Executive we are signatories of the UK Government’s Voluntary Code of Conduct for Executive Search Firms. This means: addressing gender diversity on corporate boards; acknowledging the important role of our profession in supporting chairs and nominations committees; and committing to best practice for related search processes, to assist our clients in increasing the effectiveness of their boards, and acknowledging the value that gender and other forms of diversity can bring.
To help improve the gender balance of your board or senior leadership team, or to discuss this topic further, please contact Partner Executive on 020 3178 4996.
