Business Week’s cover story, The New Gender Gap, maintained that, ‘‘men could become losers in a global economy that values mental power over might.’’ It expounded that in a white-collar economy where intellectual prowess is valued, women stand as good a chance, or perhaps even better, as men to succeed.
As the world celebrates International Women’s Day on March 8, Pakistan celebrates the highest levels of employment participation ever by women in senior positions. Women now make up 4.6% of board members of Pakistani companies, according to a February 2011 report on women in boardrooms.
Several studies have linked greater gender diversity in senior posts with financial success; this mounting body of evidence represents an important twist in the debate over women in business. For decades, women’s advancement has been seen as an issue of fairness and equality. Now some researchers say it should also be seen another way: as a smart way to make money.
According to a 2007 study by McKinsey & Company, European firms with the highest proportion of women in power saw their stock value rise by 64% over two years, compared with an average of 47%. Profits measured as a percentage of revenues at Fortune 500 firms that most aggressively promoted women were 34% higher than industry medians, a 2001 Pepperdine University study showed.
However, correlation does not equal causation; while the link between higher levels of female leadership and profits is fairly well established, it’s less clear if women are directly responsible for the success.
What is needed is an analysis to try to answer the chicken-and-egg question of whether better firms promote women or whether women in power make better firms. In identifying the correlation between gender diversity and corporate performance, suffice to say that organisations that are sensitive to gender issues, and are therefore closer to being genuine meritocracies, tend to thrive. This is supported by a recent study by Pepperdine University which concluded that businesses with women in top positions beat the industry average in terms of productivity and profitability.
– Fauzia Kerai Khan
The writer is Chief Consultant, i&b Consulting, Training, eLearning. email@example.com.
First published in the Careers Section of The DAWN National Weekend Advertiser on March 4, 2012.