Where Are the Women?

Increasingly, companies recognizing the importance of diversity at the top are investing in recruiting and developing talented women. So why aren’t we seeing more women in top roles?

The Business Case for Diversity

The facts are not in dispute. Organizations of all sizes with more women in executive roles and on boards of directors tend to outperform companies with less diversity. A 2011 study by McKinsey & Company showed that in four out of five industries, the businesses with the most women at the top earned a higher total return to shareholders than the companies with the lowest women’s representation. According to a 2012 Catalyst study, return on equity (ROE) was 35 percent higher for more diverse organizations. Of course, correlation does not necessarily equate with causation—and additional factors not identified by these studies may well be contributing to those performance figures. Still, businesses are increasingly recognizing the advantage of diversity in the upper echelons of executive offices.

Women hedge fund managers outperform their male counterparts, as demonstrated by the Rothstein Kass Women in Alternative Investments Hedge Index. In the third quarter of 2012, the women-led fund scored a net return of 8.95 percent compared to the 2.69 percent net return overall on the HFRX Global Hedge Fund Index. Rothstein Kass’s survey of over 350 senior women involved in the alternative investment industry (hedge fund, private equity and venture capital), suggested that women are more risk-adverse than men and therefore better positioned to skirt downturns and avoid market volatility.

In the last five years, corporations have been phenomenally successful at on-boarding women. Today, with more women than men graduating from universities, MBA programs and law schools, most organizations have excellent records at recruiting and hiring women. Even smaller companies are rolling out women’s leadership councils, sponsorship programs and formal and informal initiatives to develop women leaders.

However, along the way, something happens to frustrate the progress. About five to seven years into their careers, women start to leave. Sometimes high performers simply quit, but often they pull back, play it safe or actually edge themselves out of being considered for top assignments, usually in anticipation of starting families. This is the dynamic that Facebook COO Sheryl Sandberg asks women and the organizations that value them to challenge in her new book, Lean In: Women, Work, and the Will to Lead.


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