Happy International Women’s Day to everyone and especially to my fellow female leaders, the wonderful, brilliant, gentle, fierce and courageous women who inspire, lead by example and create a bright future!
This day tends to bring attention to the number of women in leadership and board positions. Despite some progress, women are still a minority in board rooms and senior leadership positions globally. Legal initiatives, such as the EU Directive on Improving the Gender Balance among directors of listed companies which set a target for large EU-listed companies of 40% representation of the underrepresented sex among non-executive directors and 33% among all directors, can be used as a tool to improve the situation but it’s not enough.
The figures are important and representation matters, but the conversation should not stop there. Board diversity is not a symbolic goal and the number of women in leadership should not be a tick-the-box exercise. It is a question of governance quality and better decision-making, not to mention higher profits.
According to studies, board gender diversity affects what happens inside the boardrooms. Boards that include at least three directors of each gender are significantly more active in board discussions than less diverse boards. Boards with at least three women directors tend to demonstrate significantly stronger engagement and oversight.
Management and boards are navigating complex operational environments and must be able to understand a plethora of diverging issues impacting the company’s operations and to solve difficult strategic challenges. The lack of diversity may negatively affect the leadership’s decision-making ability and hamper innovation, creativity, adaptability and long-term sustainability. Diverse leadership teams make better decisions significantly more often than homogeneous teams. Leadership diversity has been linked to higher innovation performance.
Last but not least: companies with greater gender diversity in leadership are more profitable than those with a less diverse leadership. Research shows a significant performance gap between companies with high and low levels of gender diversity.
These findings underline that the issue is not simply about meeting formal targets for representation or making gender balance look good on paper. It is about the impact on decision-making quality, governance effectiveness and long-term organizational performance.
When leadership teams bring diverse perspectives, experiences and ways of thinking to the table, governance becomes stronger and organizations are better equipped to navigate complexity, manage risks and seize opportunities.