How an Inclusive C-Suite Changes Organization Perspective

Gender equality continues to be a key issue in business, with women substantially underrepresented in the corporate pipeline. Its time enterprises consider increased inclusivity in the leadership, for a more balanced C suite.

Despite an abundance of studies demonstrating that businesses are more successful when they have more women in the leadership team, the majority of organizations continue to have a gender divide. Diversity and inclusion cannot be achieved in a single campaign; rather, they are perpetual causes that must be fostered, maintained, and cultivated.

There is a compelling moral case that can be made for enhancing the diversity of top management teams. 

Here are a few distinct trends in how the strategic thinking of organizations shifts in response to the employment of female executives:

Firms refocus their efforts on R&D rather than M&A

Specifically, as TMTs decide to add female executives, they transition away from a knowledge-buying strategy which is a more traditionally masculine, proactive approach — and toward a knowledge-building strategy centered on internal R&D, a more traditionally feminine, collaborative approach. On the other hand, firms reported an increase in development investments after women were appointed to senior positions, and firms demonstrated increased levels of openness to change and aversion to risk.

The impact of female appointments is more significant when women are well-integrated into the TMT

The more effectively female executives integrate into the leadership team, the greater   influence they will have on the company’s decision-making. In cases when the executive team already included at least one woman, adding female executives to the TMT alters the C-suite thinking in positive ways. 

Also Read: Women in Tech: Diversity and Inclusion (D&I) at Workplace

Firms with female CEOs often show better returns

According to S&P Global research, organizations led by female CEOs and CFOs are often more successful at outperforming the market average in terms of stock price performance. Additionally, in the 24 months after the appointment of female CEOs, their companies experienced a 20% increase in stock price momentum.

Women-led businesses frequently provide unique work culture benefits

In a 2019 Harris Poll survey, 50% of respondents stated that they would like to work for a woman-led business. 46% of individuals who felt this way were male. Women-led businesses are perceived to be more caring, purpose-driven, and offer more employee amenities. For instance, having childcare alternatives can help many working parents achieve a better work-life balance and serve as a catalyst for many women to return to or leave the workforce. 

Women executives have an impact on company innovation

According to a Harvard Business Review study released in April 2021, when women are in the C-suite, businesses become more receptive to change, focusing more on research and development and less on risk-taking initiatives. The researchers discovered that, on average, the presence of women in senior positions was sufficient to shift the corporate culture toward knowledge creation rather than acquisition.

The gender discrepancy at the C-suite level is undoubtedly preventing many enterprises from attaining their full potential.

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