Hiring more women as top managers and appointing them to corporate boards isn’t just a feel-good exercise in political correctness. It makes good business sense.
According to a recent study, Fortune 1000 companies that have made a commitment to workplace diversity enjoy many advantages and typically perform better than their competitors.
Two officials from the U.S. Chamber of Commerce’s Center for Women in Business shared the results of a wide-ranging study Thursday during the Business 2013 Conference and Expo, a trade show and conference.
Studies show that women are playing an increasingly important role in the business world.
“Women are working harder and achieving more, and yet, the upward path to the highest ranks of leadership remains narrow,” said Natalie Masri, senior director for the Center for Women in Business.
Likewise, professional options for women are broader than ever before. “Long gone are the days of women having only a few roles and fields to choose from,” Masri said.
Today, women earn 57 percent of all bachelor’s degrees and 60 percent of master’s degrees. A recent study by the Pew Research Center found that 40 percent of mothers are the primary breadwinners in their families, up from about 11 percent in 1960. And women are surging into traditionally male professions such as medicine, law and business, Masri said.
Despite the progress, women remain under-represented in top management positions and boards of directors throughout the corporate world, Masri said.
Last year, the U.S. Chamber’s Center for Women in Business conducted a study to identify companies that have made progress in recruiting women to top corporate jobs and boards of directors. The study, conducted in conjunction with the research firm McKinsey & Co., identified best practices that companies have followed in improving corporate diversity.
McKinsey highlighted 78 best performing companies that had made significant efforts to diversify their boards and top management. Those companies consistently outperformed their peers in the Fortune 1000.
The researchers found that women tend to gravitate toward certain professions, and are thus more likely to advance in those careers. Health care is one field that attracts a higher percentage of women. Subsequently, there are more opportunities for advancement, the study found.
Companies that have larger top management teams also tend to hire more women, researchers found.
Likewise, a company that has more women on the board of directors will likely create an easier path for women to reach top management positions.
“It’s easy to make the mistake of seeing this as a narrow challenge, but there are many intertwined strands,” said Roberta Zenn Phillips, executive director of the U.S. Chamber’s Center for Women in Business. “Of course it’s a women’s issue.”
“The keystone of American society is inclusiveness and rewarding hard work and merit,” Phillips said. “But it’s also a business issue. It’s simply good business to foster both halves of the workforce and to benefit from the immeasurable talent that those women bring to the table.”