The Business Case for Gender Equality

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When women serve as leaders and employees of companies—including those in male-dominated industries—businesses benefit and performance improves.

Resilient, reliable, and commercially viable companies and organizations fuel economic growth, bolster economies, catalyze social development, and support nations on their journey to self reliance. Women represent half of the world’s employment potential, and developing their talent increases an organization’s competitive advantage. Research shows that gender equality pays dividends, and a recent McKinsey study of 1,000 companies across 12 countries found that gender diverse companies were more profitable than their national industry average. Tapping into women’s unique contributions and experiences can strengthen organizations in male-dominated industries and add trillions to global GDP.

Enhancing Business Outcomes

There is a growing body of evidence establishing a correlation between increased representation of women in corporate leadership roles and stronger business outcomes for companies.

In a study of Fortune 500 companies, Catalyst found that firms with higher gender diversity in management had 35 percent better return on equity than firms with poor gender equity.

An Ernst and Young report analysis of the boards and leadership teams of the top 200 utilities in the world found that greater numbers of women on boards translates to higher returns on equity and investment, with the top 20 most diverse utilities outperforming the bottom 20—a difference that can constitute millions of dollars in profit.

And, a study in Human Resources Management Journal shows that employees like working at diverse companies and are less likely to leave, thus reducing the high costs of employee turnover.

Accelerating Global Economic Growth

A McKinsey study shows if women played an identical role in labor markets as men, they could contribute between $12 trillion and $28 trillion to global annual GDP. This means that the advancement of women’s equality in labor markets could contribute to the global economy at a value equivalent to the combined size of the Chinese and U.S. economies today.

Improving Decision-making

Women bring different perspectives to the difficult issues facing today’s corporations. Diversity of thought can result in better decision making and lead to more creative and innovative solutions. The findings of a Berkeley-Haas School of Business study study suggest that companies with more women on their board of directors are more likely to proactively improve energy efficiency, lower company costs, and invest in renewable power generation.

Last updated: November 19, 2020

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