Women’s Leadership: An Imperative For A Sustainable Future

What is it about women that makes them so adept at shepherding sustainable companies?

The evidence is in: the presence of women on boards and senior leadership teams leads to better financial performance and more sustainable organizations. According to Forbes and McKinsey studies, firms are 15 percent more profitable when women represent 30 percent of corporate leadership compared with those where women are not part of that top tier. Companies with the most women board directors get 16 percent more in return on sales and 26 percent more return on invested capital according to Catalyst.
 

Yet financial results are a limited measure of performance. And worse, they are lagging indicators. Many companies use a broader assessment; their balanced scorecard has four components. In addition to financial measures, they look at value experienced by their customers, effectiveness of organizational processes, and development of skills and capabilities to grow. By planning and measuring goals in these additional three categories, they are taking a longer-term view of building the company’s sustainable success.

Sally Helgesen’s research points out that women in leadership have a broader, longer-term view as compared with men. The data that women pay attention to goes beyond the numbers. Helgesen cites examples of women who sounded the alarm on seeing the signs of the 2008 financial crisis but were ignored because everyone was focusing on the short term.

Women leaders are being listened to now. In a study of 163 multinational companies over 13 years, women in the C-suite led to a 10 percent increase in openness to change and a 14 percent decrease in risk-taking. This and other research suggest that including the diverse perspectives that women bring leads to more scrutiny in decision-making, and consequently decreases the chances of leadership teams making rash or risky decisions. Throw into the mix the research that shows men and women weigh risk differently. Men put a stronger emphasis on the possible (short-term) payoff, while women put more emphasis on the (long-term) impact a decision will have on the people involved, their engagement, and well-being. 
 
A comprehensive review that aggregates results of 140 studies shows that organizations with women on the board created stronger internal controls and management oversight, reduced risk of fraud or other ethical violations, created a positive work environment and greater stakeholder engagement, and improved reputation and brand.

All of these markers of the positive force of women in leadership lead to this punchline: women are the key to a sustainable future. A recent list by BMG BizClick Media Group, which publishes Sustainability Magazine, bears this out. They named the Top 100 Companies in Sustainability based on their environmental, social, and governance (ESG) standards performance and business plans. When I did an analysis of the top 20 companies on their list, I discovered that women had a significant role in leadership. In these companies, women hold an average of nearly four board seats and make up an average of 28 percent of the executive leadership team. This is a notable difference from the general statistics on women’s leadership representation. The average number of women on boards of all companies disclosing data is 1.83. The consulting firm Mercer reports that on average, women represent 23 percent of senior leadership teams.

So, what is it about women that makes them so adept at shepherding sustainable companies? Through my in-depth research at the University of Pennsylvania and behavioral analysis of highly successful women leaders over the last 20 years, I have seen that they demonstrate specific characteristics.

Successful women leaders are participative, sharing power with their team members and reaching out to others for help. They create engagement with a shared purpose and belief in success.

Women who lead successfully are inclusive. They are also empathetic, making them adept at building connections and community. They bridge differences between others and listen to all voices. Problem-solving and decision-making for them is a team-engaging activity.

Perhaps, the most differentiating characteristic of women who lead successfully is that they are perceptive. They are self-aware and understand their impact on others. They are culturally and politically savvy, able to read a room and pick up on unspoken norms of an environment. Their conceptual thinking enables them to take that big picture long-term view.

All of these characteristics add up to a formula for successful collaboration, which will be essential to conquer issues like the effects of climate change and nature loss and to build a more sustainable future.

Carol Vallone Mitchell, Ph. D. is the author of Collaboration Code: How Men Lead Culture Change and Nurture Tomorrow’s Leaders and Breaking Through “Bitch”: How Women Can Shatter Stereotypes and Lead Fearlessly. She is Co-Founder of Talent Strategy Partners, a leadership development firm helping organizations accelerate business results by developing their emerging leaders who nurture the right workplace culture. She has developed over 50 competency models, including gender-specific, research-based models, used to assess and develop men and women in all industries. Visit www.tsphr.com  Connect Carol Vallone Mitchell, Ph. D.