In 2018, it was estimated that women contribute in excess of $40 trillion in global consumer spending every year. This figure has only grown since, with women driving between 70 and 80 per cent of all consumer purchases.
- By Anisha Singh
There are more women running Fortune 500 businesses today than at any point in the history of the list. These are words we hear every other year, in a parade of puff pieces and profiles trotted out to showcase the strides towards equality being taken by the world’s largest businesses. What’s more telling is what the majority of these articles fail to mention – that this ‘highest ever number’ consists of just 33 individuals. To put that into perspective, only 6.6 per cent of the Fortune 500 CEOs are women. Conduct a similar exercise in India, and the figures turn even starker. Across Nifty-500 firms, less than 5 per cent of CEOs were women, as per information available on the NSE Infobase.
Cast a wider net and include board members, and that number still only stands at 15 per cent. The fact that these figures were reached only in the wake of a gender quota implemented in 2014 only further highlights the scale of the issue. This despite much talk about the importance of gender diversity and corporate inclusivity. Over the decades, women have proved their competency and professionalism in the workforce many times over. Despite that, their representation in a company tapers off the higher up the professional ladder one goes. In an attempt to address this issue, here are four key reasons the world needs more women-led businesses:
Innovation through diversity
True innovation is rarely born in a vacuum. It requires challenge and argument, and divergence of viewpoint and experience – and that’s exactly what diversity provides. Whether of gender, race, culture, or even age, diversity has repeatedly proven itself indispensable to innovation. Women, no matter where they’re from, will always experience life in a fundamentally different manner. And by bringing that fresh perspective to the top of a business ecosystem, they have a chance to radically restructure and reorganise staid business practices and operations, transforming a static organisation into a forward-thinking hub of innovation.
In 2018, it was estimated that women contribute in excess of $40 trillion in global consumer spending every year. This figure has only grown since, with women driving between 70 and 80 per cent of all consumer purchases. Yet by failing to adequately represent this key demographic in their boardrooms, that’s precisely what many companies do. Women are frequently underserved, under-marketed, and undervalued in the business ecosphere. The only exception to this is when companies target women with patronising marketing campaigns, in the hopes that a product repackaged in pink will drive sales.
By accessing the insights offered by both men and women, companies have a chance to truly connect with their customer base and devise products and services that cater to the public’s needs and wants – rather than perpetuating superficial stereotypes.
Benefits of a soft skills
While age-old wisdom may dictate the importance of logic over emotion in business scenarios, that’s one piece of advice that doesn’t hold up to scrutiny. Characteristics like integrity, responsibility, forgiveness, and compassion are all key to the successful running of a business and can have a measurable impact on a company’s bottom line. According to research conducted by leadership consultancy KRW International, CEOs who were ranked highly for these attributes by their employees also saw a 9.35 per cent return on assets over a two-year period. By comparison, CEOs with a low ranking averaged a ROA of only 1.93 per cent.
Women have consistently been found to outperform men on nearly every measure of emotional intelligence, coming out on top in 11 of 12 ‘emotional intelligence competencies’. These are all skills essential to effective leadership and result in a business environment that emphasises personal connections and mutual interests over lopsided power structures – all to the ultimate benefit of a company’s balance sheet.
While women have undoubtedly established themselves in the workforce, they have yet to truly inhabit the boardroom – rare exceptions aside. This lack of visibility at the highest echelons discourages them from fully committing to a business. Ultimately, it results in the creation of a glass ceiling that is partially self-perpetuating. After all, if you’ve never seen a woman head a company, how can you ever hope to do so? This mentality is negative and self-defeatist and harms all parties involved. It acts as an engrained mental barrier and companies miss out on the full scope of their employees’ talents. Putting deserving women in leadership roles can offer the promise of due recognition for their work, and a system that judges them purely on merit, it can inspire and motivate women to give their utmost at work on a daily basis.
Anisha Singh is the Founding Partner at She Capital. Views expressed are the author’s own.