Women In Leadership
It is 2024, and the world still needs more women in leadership positions.
According to UN Women, women hold Heads of State and/or Government roles in only 26 out of the 193 UN member states (13.5% of countries) and only 13 nations have a 50/50 gender split amongst Ministers leading policy areas (6.7%). This leadership disparity extends down from government to business, with only 28% of C-suite positions in the US and Canada held by women in 2023 according to McKinsey & Company. Although this represents a 9-percentage point increase since 2015, this progress is too little and too slow. Fortune has calculated that only 5.8% of the top 500 companies globally are run by women – this is a record high and the numbers are even more dire for women of colour. Estimates of the number of female leaders in business vary depending on the definition of leadership used, sample size, etc. but the overall message is the same – there are not enough female leaders in the world.
In spite of this, we are seeing women in senior leadership positions exemplifying how their strengths complement, benefit and enable the success of companies globally. Some of the most well-known current female CEOs include Mary Barra (General Motors, appointed in 2014) and Karen Lynch (CVS Health, appointed in 2021) and Julie Sweet (Accenture, appointed in 2019). Under these women, revenues have thrived and their organisations have seen changing visions, strategies and cultures which have increased resilience to recent economic challenges. In fact, companies with female leaders tend to perform better financially. These women epitomise Leaders of the Future and many of the skills that have led them to where they are today are not unique.
Skills of the Leaders of the Future
The American Psychological Association has stated that “psychological research shows women leaders improve businesses”. In 2020, the Harvard Business Review found that colleagues rate female leaders as more effective than their male counterparts. The explanations and research behind these findings are numerous, including the increased tendency of female leaders to employ transformational leadership styles. A transformational leadership style involves empowering employees to achieve a common goal through shared vision, individualised support and innovation promotion. CEOs who use transformational leadership styles have been shown to increase employee motivation and company financial performance. Other research shows that female leaders positively influence other members of their organisations by improving team collaboration, increasing perceptions of fair treatment in the workplace and promoting high levels of trust in an organisation.
In 2019, McKinsey & Company identified nine leadership characteristics necessary to address future challenges. Of these nine traits, female leaders more often applied five, men two and two were applied equally by men and women (see figure below).
Source: McKinsey & Company (2019)
Many of these traits more often expressed by female leaders can be categorised as soft skills. Soft skills are often linked to emotional intelligence characteristics such as empathy and communication, differing from technical knowledge and other ‘hard skills’ in that they are not measurable. Soft skills have been identified by numerous CEOs as extremely valuable leadership traits and research has linked positive financial performance to CEOs who exhibit soft skills such as compassion and integrity.
Gender diversity in an organisation does more than just give it a good reputation. Gender diversity increases innovation, company profitability and global performance. This encompasses diversity at all levels of an organisation – not just within senior leadership teams, however change often has to start at the top. So why then, if these characteristics which lead to positive organisational performance across a range of measures and are more commonly expressed by female leaders, do we still have a shortage of female leaders in businesses?
The theme for this year’s International Women’s Day is Inspire Inclusion. Companies must inspire inclusion at all levels of the organisation – from female leadership training to equal opportunity provision. Listening to and learning from employees within each specific organisation to address the challenges and barriers women face will support companies in promoting gender diversity and helping them unlock the numerous corporate benefits this brings.
A defining feature of business success today is accelerated transformation- by developing your female leaders through bespoke programs aimed at tackling your unique business opportunities, Prism can help to make sure that you have the most capable, confident, and collaborative leaders in place to win.
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