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Women on Boards: A move that pays off



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Exploring facets of a gradual yet definite phenomenon called ‘woman business leaders on top seats”.

According to a recent report by Index Provider MSCI, companies with strong female leadership deliver a 36% higher return on equity. This study included 1,643 companies covered by the MSCI World Index. Strong Female leadership constitutes those institutions that have three or more women on the board or a female CEO and at least one other female board member.

Other interesting observations reflected during the course of research are as follows:

- Over an extended period of time i.e. from the end of 2009 to September 2015, companies with woman business leaders scored an average of 10.1% return on equity as compared with 7.4% for those firms without women on boards.

- Companies with poor representation of women leaders had to face more controversies. 24% more governance related issues and corporate scandals than the average hit them.

- Companies where the CEO is a woman were more likely to have more than one woman on the board.

- US Companies were more likely to appoint a female CEO and a CFO than their European counterparts, even while lagging in selecting women directors.

A previous study by Grant Thornton of the listed companies in US, UK and India revealed that diverse executive boards outperform peers run by all-male boards. Opportunity costs for the all-male boards (in relation to the return on assets) for all 3 markets combined, stood at a staggering US$655 billion for the year 2014.

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Companies need to make conscious effort to boost performance through board diversity and ensuring female participation for executive roles. The investors, instead of waiting for quotas and mandates can put positive pressure on companies to have gender balanced boards. Lastly, governments should plan certain incentives for mixed executive boards, as they are known to generate higher productivity and return on assets that ultimately strengthen the global economy.

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Women on Boards: A move that pays off

  1. 1. Top 6 perks of having women on boards 8 Cons of using excel spreadsheets in hr Employee Appreciation & Productive Recognition Reasons why Excel may not be the best option for managing organizational workforce
  2. 2. Women in Leadership – A quick recap Evolution of Spreadsheets - A quick timelineWhat Is Employee Appreciation
  3. 3. Performance Credibility, Contribution in Busi- ness Profits and ‘Quotas’ mandated by govern- ment laws of various nations have led to the rise in business women on boards of companies
  4. 4. What do Statistics say about Women Leaders?
  5. 5. Which companies classify as supportive of ‘Strong Female Leadership’ ?
  6. 6. More Insights from the MSCI Study
  7. 7. Cake HR - Your HR. Simplified.
  8. 8. Top 6 Perks of Having Women Leaders for Top Executive Seats – A move that is paying off huge
  9. 9. #1 – Improved Decision Making
  10. 10. #2 – Foster the principle of inclusiveness
  11. 11. In financially stressful situations, the consensus – building abilities of women leaders comes to rescue, helping the companies cope and perform better
  12. 12. #3 – Cohesive Work Culture
  13. 13. #4 – Reflects progressive image of company
  14. 14. Several rating agencies and investment funds use the extent of ‘Gender Diversity Reputation’ as one of the investment criteria
  15. 15. #5 – Better insight into buying trends
  16. 16. Women drive approximately 70% purchase decisions by the consumers in European Union and 80% of them in United States
  17. 17. #6 – Better Stock Performance
  18. 18. In fact, the opportunity cost for all male-boards in US, UK and India combined stood at a staggering US $655 billion. They were clearly outperformed by gender diverse boards.
  19. 19. Though the perks are a clear testimony to the fact that women leaders at board level ensue business profits, the adoption of idea is still lagging due to mindset challenges.
  20. 20. Challenge #1 – Women at top are generally entrusted with non-executive roles. Very few are in-charge of key positions that actually matter
  21. 21. Challenge #2 – Quota system of ensuring minimum percentage of female board members has met with criticism from multiple quarters
  22. 22. Things that hinder success of quota system include – Lower Percentage earmarked for women leaders, no stringent guidelines and in some cases appointment of under qualified female candidates due to quota pressure
  23. 23. Challenge #3 – Existence of the “Golden Skirts” phenomenon where a single woman occupies multiple board seats due to dearth of required competent talent or due to government mandate. This has been looked down upon by industry experts
  24. 24. Challenge #4 – Annual Pay of women has just begun to equal the amount men were earning 10 years ago. Disparity in income for male and female candidates is present across jobs and sectors. This sometimes acts as a discouragement for business women to take up higher responsibilities
  25. 25. Challenge #5 – Corporate notion held by many male counterparts that female entrepreneurs cannot do justice to their roles owing to familial responsibilities
  26. 26. These challenges deter the momentum of women leadership gaining ground at the board level. However, industry experts be- lieve the scenario is sure to change as more women led success stories come to the forefront.
  27. 27. Way Forward for Women Business Leaders
  28. 28. This journey can be completed faster with the 30% goal being achieved by 2020 if following 2 mechanisms are considered:Ac- celerated Conversion – Doubles the proportion of new board seats taken by womenAccelerated Turnover - Turnover of existing board seats could increase making way for women
  29. 29. Inspiring Examples supporting Women Leadership
  30. 30. Final Words…
  31. 31. Cake HR - Your HR. Simplified.