Tipping the balance towards a higher number of female decision-makers works to a company’s advantage.

An organisation that paves the way for women to ascend to key positions is nearly twice as likely to create an inclusive work environment – and this can lead to doing better business overall.

New data from DDI, a global leadership consultancy, shows organisations with a higher percentage of women in leadership roles are more likely to welcome a diversity of perspectives than those with fewer female bosses. 

These are companies with 30% or more women in senior leadership and 40% or more women in middle management positions.

In companies where there is a greater number of men at the helm, male bosses (39%) believe their culture tends to drown out such diversity.

“Women leaders are driving more inclusive cultures and stronger financial performance for their organisations – yet the problem of women’s disproportionately low representation at the top persists,” said Tacy M. Byham, DDI’s chief executive.

Women have fewer opportunities for development

One reason for the lower participation rate of women in leadership roles is exclusion: they are often locked out of opportunities to grow and take on key assignments.

“Our data reveals many women are not getting the leadership development support they need to progress and are turning elsewhere, with women 1.5x more likely to leave their companies to advance their careers than men,” Byham said.

Fewer than 1 in 4 women are said to receive formal mentorship at work compared to nearly 1 in 3 men. And the higher one ascends on the corporate ladder, the wider the disparity: only 27% of women versus 38% of men are vetted for important roles.

One area of expertise where women are reportedly locked out of is the profit & loss function, which experts at DDI say is “a crucial steppingstone for advancing into C-Suite roles”.

Only 67% of female senior executives managed P&L compared to 79% of their male counterparts.

Moreover, leadership skills represent another area of disparity. Women are reportedly:

• 12% less likely to be given leadership development opportunities
• 15% less likely to be given feedback on their leadership skills

“To avoid losing out on this valuable talent,” Byham said, “companies need to turn their attention toward creating workplaces that enable women to thrive.”

Women’s impact on financial performance

The concepts of DEI and the business impact of women are “tightly linked,” so much so that organisations in the top 10% for financial performance also have a greater number of female leaders (29%) than companies that lag behind financially (23%).

Yet, even top organisations struggle to diversify their leadership pipelines when they lack a proper talent development plan in place.

“On average, women make up only 23% of high-potential pools at top-performing organisations,” DDI said. “The numbers are even smaller in underperforming organisations, where only 14% of high-potential leadership pools are women.”

Overlooking critical statistics on female leaders can be detrimental to a company’s bottom line.

While there are business needs that require immediate attention, having a gender-balanced leadership bench – especially one that welcomes a diversity of perspectives – can increase an organisation’s capability to solve problems, not the least of which is the challenge of bolstering financial performance.

Ignoring the data on women in leadership will only weaken a company’s foundation for success – impeding diversity and potentially stifling innovation and growth.