Home » CEO Briefing Newsletter » Want to Drive Your Return on Equity 41% Higher? Put Women on Your Board

Want to Drive Your Return on Equity 41% Higher? Put Women on Your Board

In 2010 McKinsey did a study on the performance of companies based on the presence of women on boards of …

In 2010 McKinsey did a study on the performance of companies based on the presence of women on boards of directors. The study was conclusive: having women on the board will make a company more successful. The Harvard Business Review analyzed McKinsey’s study, and the numbers don’t lie: we need more women on boards. Women on boards won’t just drive your company to modest success; women will drive your return on equity up 41% and better your operating results by 56%. Why the correlation?

Despite such compelling numbers, however, the number of women and minorities on U.S. boards of directors has steadily declined. In 2010, women held only a fraction of the board seats of Fortune 500 companies, 15.7%. If women earn 44% of MBAs in the U.S. and 57% of university degrees, why aren’t we rushing to seat them on our boards?

HBR’s answer is “gender fatigue.” The review states that men aren’t aware of the gender gap; they just don’t see what’s really going on around them. Fifty six percent of men think that women strongly progressed in the workplace in the last decade, whereas only 39% of women agree. Almost half (49%) of women see gender bias as a live issue in the workplace, whereas only 28% of men do.

Read: Women on Boards: America Is Falling Behind

About Chief Executive

Chief Executive magazine (published since 1977) is the definitive source that CEOs turn to for insight and ideas that help increase their effectiveness and grow their business. Chief Executive Group also produces e-newsletters and online content at chiefexecutive.net and manages Chief Executive Network and other executive peer groups, as well as conferences and roundtables that enable top corporate officers to discuss key subjects and share their experiences within a community of peers. Chief Executive facilitates the annual “CEO of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers, and is known throughout the U.S. and elsewhere for its annual ranking of Best & Worst States for Business. Visit www.chiefexecutive.net for more information.