I am often asked for my thoughts regarding why women are not joining corporate boards at a faster rate, and what corporations can do about it. While most people still see the economic empowerment of women as an equality issue, I see it for what it really is: a business issue.
According to a recent paper by Deloitte, economic studies show that corporations with women on boards and in senior leadership positions have a higher return on equity. In Europe, these returns have been estimated at more than 10 percent higher. There's a business case to be made for the results women bring to the table -- but to really see more women in leadership positions, we need CEOs and business leaders to understand that greater diversity at the most senior levels of business will help them gain a competitive advantage.
Why? Because diversity allows for better decision-making and less group-think. Diverse teams also produce more innovative solutions and products, deal more effectively with risk, and better relate with their customer base. Remember that almost 80 percent of consumer decisions are influenced by women. Up to this point, the conversation on this topic has largely been about fairness and goodwill. That needs to change. We must better articulate the superior business results that flow from leadership diversity if we are to generate a greater impetus for change.
Many countries have tried using quotas to get more women to hold board seats. This has worked in Norway, where over 40 percent female representation has been achieved. But, this tactic will not solve the underlying challenges we face in corporate America, and does nothing to ensure that there is an increasing pool of qualified women with relevant experience to serve on boards.
Before we see a trend-break in the percentage of women in the boardroom, we need to solve the "leaky pipeline" that diminishes the potential talent pool, especially in operational (P&L) roles, which are often required for director positions. Women enter the workforce in similar percentages as men in the U.S., but the percentage of women who advance to manager and director levels drops off drastically compared to male counterparts. A new report from Catalyst entitled "Good Intentions, Imperfect Execution? Women Get Fewer of the 'Hot Jobs' Needed to Advance," found that women often get fewer opportunities to run larger, more visible projects, and miss out on mission critical roles and international experiences that are critical to advancement.
So what can current leadership do to build a stronger pipeline, and what can women in the workforce do to get ahead? On the leadership side, it's important to work on the problem from a cultural perspective. Corporations that focus on culture as a way of building inclusive and diverse populations have the advantage. Creating a culture where diversity and innovation are not only welcome, but expected and measured, is critical if women are to thrive in business. CEOs and other leaders need to role model the behaviors aligned with creating an inclusive and diverse organization. As with so many things, it is the "tone from the top" that makes the greatest impact.
My advice to women seeking to get ahead in business is to learn to speak up and become their own advocate. A recent article in the Harvard Business Review found that the skills that propel women to the top of the class in school may be the same qualities that hold them back in the workplace. Women need to learn how to better challenge and influence authority while enhancing their persuasion skills, rather than just demurely doing their homework. Prepare, but learn how to improvise. In school -- and I was a victim of this -- you prepare as much as possible to answer any question you might be asked. This is not the case in business. Being flexible and able to adapt to the situation at hand is far more important than having a canned pitch.
Developing your network and expressing your goals is also critical, as many leadership positions and project management appointments come from internal recommendations. In fact, this is where sponsorship is important, especially when high profile assignments are being discussed and names considered. Sponsors have significant influence inside an organization and advocate on your behalf, helping to secure these important roles.
I belong to an organization called the Committee of 200 (C200), composed of the world's most successful female entrepreneurs and corporate leaders. Our mission, success shared, is about empowering women to achieve success at the highest echelons of business. Even at the top, networking, sponsorship and supporting each other is more important than ever.
We still have a long way to go, but I believe the tide is turning for women in business, and we can all play a role in getting to the other side.