Dive Brief:
- Employers with female CEOs and CFOs tend to have cultures of diversity and inclusion, with more women on their boards of directors, according to a new report from S&P Global.
- The report, When Women Lead, Firms Win, said that companies with female CEOs have twice the number of female board members, compared to the market average (23% versus 11%). That's important because, as the research also found, companies with greater gender diversity on their board were larger and more profitable than firms with little gender diversity.
- "Diversity and inclusion across the C-suite and throughout companies benefits everyone — all employees, companies and economies," said Doug Peterson, president and CEO of S&P Global, in a statement announcing the findings.
Dive Insight:
While some employers have undertaken diversity initiatives on their own, others will soon have little choice on the matter. Recently enacted legislation in California requires all publicly held domestic or foreign corporations with "principal executive offices" in California to have at least one female director on their boards by the end of calendar year 2019. Many firms are already in compliance, but an estimated one-fifth of those subject to the law still need to add a woman to their boards to achieve compliance, according to an academic paper released earlier this month.
For employers looking to adopt diversity and inclusion strategies — especially plans that will target the C-suite and board — stakeholder buy-in will be key. A study published earlier this year in the Harvard Business Review found that gender diversity can improve a company's market value and revenue but only if accepted as a norm. Opinions about the topic matter, the researchers said, because the success of diversity depends on whether it can be used to attract new talent, nurture diverse ideas and signal competent management to investors.
Without buy-in from both leadership and workers, employers may struggle to get such initiatives off the ground. Real support — in words, actions and dollars — is necessary, experts say. Ken Bouyer, director of inclusiveness recruiting at Ernst & Young Americas, previously told HR Dive that employers need to find a way to encourage everyone to value differences; "It is important for businesses to establish a framework to deliberately foster an inclusive environment where differences, talents and perspectives of all people are maximized to create the highest performing teams."
