HomeParity, Performance and Profits: A Case for Women and Work

Parity, Performance and Profits: A Case for Women and Work

May 08, 2016 1553Views

There are too many boys in the boardroom, and it’s not good for business. Results of a comprehensive study done by the Peterson Institute reveal a strong association between higher profitability and a higher percentage of women in C-level positions, such as Chief Executive Officer, Chief Financial Officer, etc.

The study also highlights how firms with no women in executive roles can experience 15% growth in net revenue by increasing female representation in senior management by 30%(1).

But the power of parity exists beyond the ivory towers of corporate America. A 2015 study by the McKinsey Global Institute reveals that achieving workforce equality (in terms of labor force participation rates, hours worked and the sector mix of employment) would boost global GDP 26% higher by 2025(2).  

The parity problem however is complex and while the proposed solutions are multi-faceted, McKinsey identifies financial inclusion as being a critical component of improvement. Providing women with access to financial services is a key way to involve them in the global economy and help support women-owned businesses.

The need for these services is most stark in emerging economies, much like those of Sub-Saharan Africa, where social norms, restrictive legislation and lack of infrastructure hinder access.

Microfinance beneficiaries

Image: Develop Africa Microfinance Beneficiaries

Microfinance is a way to specifically address that issue and help female entrepreneurs in Africa directly. Not only does this provide women with much needed capital,  but from a social standpoint, providing them with resources empowers them to make important decisions and gain respect in their communities.

From Silicon Valley to Sierra Leone, the benefits of balancing the proportion of women to men are too great to ignore.

(1) Marcus Noland, Tyler Moran, Barbara Kotschwar, Is Gender Diversity Profitable? Evidence from a Global Survey, Peterson Institute for International Economics, 2016.

(2) McKinsey & Company, The Power of Parity: How Advancing Women’s Equality Can Add $12 Trillion to Global Growth, New York, 2015.