Yesterday marked Women's Equality Day, the commemoration of women's suffrage achieved in 1920. What better time to take stock of what's left to do?
We need a national conversation led by the White House to explore how women decision-makers can help achieve better economic performance and a more prosperous future for all.
The administration of Barack Obama has already taken the first step by appointing talented women -- including Mary Schapiro, who holds the top job at the Securities and Exchange Commission; Elizabeth Warren, who chairs the Congressional Oversight Panel; and Sheila Bair, who heads the Federal Deposit Insurance Corp. -- to help dig us out of the financial mess.
Having a few females at the top is wonderful, but until we have at least 30 percent of senior women in leadership, we will be ignoring a strong dynamic that is working well elsewhere.
Today, a growing body of research that shows positive outcomes from having balanced leadership has been ignored. Other countries are addressing the fundamental issue of leadership in ways that have yet to gain much traction in the U.S. We can certainly do better.
Tapping the full range of talent that includes the skills, experience and leadership of women as well as men is hardly a radical idea. As the Economist magazine famously wrote in 2006, "Forget China, India and the Internet: Economic growth is driven by women." An increasing number of reports show that having at least 30 percent of women in corporate and governmental leadership roles improves decision-making, opens up institutions and removes barriers to full participation.
The U.S. has much to gain from a new leadership model. Economic growth and stock prices can only benefit.
New York-based consulting firm McKinsey & Co. has released a series of reports since 2007 making the case that gender diversity at the top is a corporate performance driver. Yet, they note that three-quarters of 1,500 biggest companies have no women on their management boards. Further, there are only 28 female chief executive officers in 1,000 largest companies.
Goldman Sachs, the most profitable securities firm on Wall Street, recommends investing in countries where the gender gap is closing and where the "laws and social norms that have discriminated against women are shifting." Its studies show gross-domestic-product growth accelerates when women hold positions of power. Goldman has created the 10,000 Women Initiative, a $100 million, five-year program to provide an advanced business education for women.
Failing to address challenges that keep women out of leadership is costly. New York-based research group Catalyst Inc. has shown that firms with three or more women on management boards boosted their return on equity by 112 percent, compared with those with fewer women.
Recently, French President Nicolas Sarkozy joined a fast- moving trend in Europe to achieve 30 percent to 40 percent women on corporate boards. The French are following the lead of Norway, Spain and the Netherlands, which have already moved to accomplish these goals. The World Bank and the United Nations' Global Compact policy initiative have also recognized women's advancement as essential to economic growth.
Michel Ferrary, a professor of management at the Skema Business School in Sophia Antipolis, France, studied the effects of balanced leadership in France during the financial crisis of 2007-08. "The more women there were in a company's management, the less the share price fell in 2008," he said.
Similar results have been published by Pepperdine University in Malibu, California, and in the U.K., India and Australia. Gender equality, as an investment concept, has been taken up by mutual funds such as Pax World Investments, which recently started a Global Women's Equality Fund betting that companies with more diverse leadership will perform better than others. A recent study by the National Council for Research on Women, based on data from Hedge Fund Research Inc., showed women hedge-fund managers outperformed their male counterparts.
Our country has nothing to lose and much to gain by addressing the lack of women in top leadership. But it won't just happen. The U.S., a country that aspires to be a world leader, ranks a pathetic 31st out of 134 countries in eliminating the disparities between women and men in the World Economic Forum's Global Gender Gap Report.
On the 90th anniversary of women's suffrage, President Obama should consider convening a White House Roundtable to find ways to increase the number of women decision-makers in the economy. Then we can celebrate women's equality in America.
This piece was originally published at Bloomberg.com.
Linda Tarr-Whelan is a Demos distinguished senior fellow, author of "Women Lead the Way: Your Guide to Stepping Up to Leadership and Changing the World" and a former ambassador to the United Nations Commission on the Status of Women. Jacki Zehner is a consultant, vice chairman of the Women's Funding Network, and a former partner and managing director of Goldman Sachs Group Inc. The opinions expressed are their own.
To contact the writers of this post: Linda Tarr-Whelan at firstname.lastname@example.org; Jacki Zehner at email@example.com.
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