David Mielke: Women matter... and the reasons may surprise you
This short headline is obvious. But it’s never truer than in business today.
A recent report with that same title, published by McKinsey and Company, found that companies with three or more women in senior management positions scored higher in “organizational excellence.” The results were even more significant if there was a critical mass of women — at least three women on a management team of 10 people.
In addition, companies with a higher representation of women at the senior management and board level also had the best financial performance — operating margins and market capitalization twice as high as those with lower-ranked companies.
A recent Pepperdine University study found after tracking performance of about 200 Fortune 500 companies that those with a better record of promoting women and with a higher percentage of women at the upper management and board level tended to rank higher in profitability.
In its recent “Groundbreakers” report, Ernst & Young cites data from Goldman Sachs that found by increasing the female employment rates, the U.S. GDP could be increased by as much as 9%. In January 2009, the New York Times reported that women in the workforce passed the 49% mark. The Financial Times in April found men lost 80% of the 5.1 million jobs since the start of the recession.
What can you learn from these studies?
We cannot state that women in senior positions “cause” higher organizational excellence and better financial performance, but the association of women and business success is noteworthy.
How are we doing in Michigan? Are we moving to create a competitive advantage through pro-active steps to move more women to upper level management and board positions?
The answers to these questions and more will be announced Wed., Oct. 21 when Inforum (formerly the Women’s Economic Club of Detroit) and the College of Business at Eastern Michigan University will release the results of the “2009 Michigan Women’s Leadership Index” (WLI).
The WLI, first published in 2003, is an innovative bi-annual survey designed to provide a means to measure the role of women in the 100 largest publicly held companies in Michigan. It is calculated by taking the percentage of women on the board of directors and the percentage of women among the top five or fewer officers as reported to the SEC.
A select group of companies are designated as “Most Valuable Players”, those companies who have earned at least 10 points of a possible 30.
What to watch for this week:
â€¢ How many MVPs will we have this year? (A hint, there were eight in 2007.)
â€¢ How many top 100 companies have a woman CEO? (A hint, there were none in 2007)
â€¢ What is the percentage of board seats held by women? (A hint, 9.8% in 2007.)
â€¢ What percentage of the companies has a woman in the top five wage earners? (A hint, 31 had at least one in the top five in 2007.)
â€¢ If you work for one of the 100 largest publicly held companies in Michigan, what is your company’s score. (A hint, check out the list.)
What will you learn from the index report this week?
â€¢ Companies should consider a call to action to work toward diversity at the highest levels. Studies are increasingly tying financial performance to the inclusion of women at upper management and board positions.
â€¢ Qualified women exist. According to a report from InterOrganization Network (ION), an alliance of women’s business organizations, women with the capability to serve on boards are readily available.
â€¢ Recruitment and development of women should be a goal. Start the pipeline now within companies to “grow your own”.
â€¢ The commitment comes from the top. In 2007, there were no women CEOs in the 100 companies surveyed. Therefore, it takes a commitment from the top of these companies to make it happen.
â€¢ Women should be proactive. Inforum’s Center for Leadership is an excellent resource for women to develop their leadership skills.
When you see the results of the Michigan Women’s Leadership Index this week, remember “Women Matter.”
David Mielke is dean of the Eastern Michigan University College of Business, recently named a Best Business School for the sixth straight year by The Princeton Review. He can be reached at email@example.com.