Female leadership better for business, study shows

23 March 2015 -

As female-owned startups thrive, consultancy recommends steps for boosting women’s leadership opportunities in corporations

Jermaine Haughton

Inflexible hierarchies are the biggest barriers to female progress into senior, corporate roles, according to research from global career consultants Right Management. In its new report When Women Lead Businesses Do Better, the firm has tabled more than 20 recommendations for developing female leaders, based upon investigations of success stories behind key, female-owned companies – and why women struggle to find top jobs within established organisations.

Despite making up more than half of full-time university undergraduates and almost half of the workforce, women comprise only around one third of managers, directors and senior officials. The advancement of females into positions of power makes business sense, the report says, as companies with female directors

1. Perform better on share price;

2. Show a higher return on equity;

3. Have higher income growth, and

4. Tend to have less debt and higher valuations.

Above all, the report expresses a need for women in senior management roles to become hands-on “real models” – rather than role models – by mentoring ambitious female workers and being honest about how their successes can be understood and replicated. The recommendations also urge senior leaders to i) use technology in ways that enable women’s ideas to be heard, ii) create more part-time leadership roles and iii) implement processes to reward collaborative working.

For Right Management managing director Ian Symes, the advice provides an achievable blueprint to help businesses better facilitate women’s progress into leadership roles. “Women are still under-represented in senior leadership positions in the corporate world,” he said, “despite the benefits of having women in board-level positions being widely known. Meanwhile, women-led SMEs are thriving, providing £50 billion of UK economic output between 2006 and 2010 and predicted to create one in three new jobs in the US by 2018.”

He added: “We were curious to understand why women are seeing such success in their own companies, but not in established businesses – and how organisations can better accommodate their evident creative and entrepreneurial zeal. We spoke at length with more than 35 women in senior roles, in both established organisations and women-owned businesses. We found the same things being said again and again: the corporate environment is the principal barrier to women fulfilling their ambition to lead. It’s time that established organisations looked to their women-owned counterparts to understand where they could, and should, be doing things better. If they don’t, then today’s colleagues could all-too easily become tomorrow’s competitors as unsatisfied women leave to start and grow new businesses.”

In Symes’ view, it is high time for the organisational environment in corporations to change. “Since the industrial revolution,” he explained, “businesses have been built with men in mind, and the changes that have occurred have been led by men. With that in mind, we shouldn’t be surprised that women often find it difficult to fulfil their potential within these structures and so forge a path of their own. We should also recognise that women may look at established organisations and not be attracted to the idea of leading them.”

For further thoughts on women’s struggle for workplace progress, download CMI’s infographic on female executive pay.