Women Leaders Good for Business : Mentoring an Effective Route to the Top

Women at the top are good for business. It’s official. Both Catalyst, the US research organisation, and McKinsey & Company have taken very different approaches to research drawing the same conclusions: having more women in leadership generates stronger financial returns.

Catalyst’s research with Fortune 500 companies in the USA demonstrated that those with at least 3 women on the board out-performed those with few or no women by a staggering:

+ 73% return on sales
+ 83% return on equity
+ 112% return on invested capital

Similar findings come from the McKinsey Report, where those companies with the most women on their senior team achieved superior growth in equity, operational results and share price. Where there were at least a third of the senior team were women, these companies also outperformed those with no women on 9 measures of organisational excellence.

However, in the UK, the Equality and Human Rights Commission estimates that it could take three-quarters of a century before directorships are balanced equally between the genders. "Workplaces need to change if companies are to attract and retain the best employees," a spokeswoman said.

Elsewhere in Europe, the picture is very different. The leader is Norway, where at least 40 per cent of company directors are now women, thanks to laws introduced in 2006. Longitudinal research of the impact this has generated (due 2012) is anticipated to show positive results on multiple levels. The strategy has now also spread to Spain which has a 40 per cent quota, although not yet legally mandated. Italy, France, Finland, Germany and Sweden have all either set similar recommended levels, or have legislation going through parliament. And Europe's Fundamental Rights Commissioner, Viviane Reding, last month warned that unless more European boardroom seats are filled by women by 2011, she will impose a legal quota.

With FTSE 100 companies in the UK slow to increase levels of female directors – still only 12% of directors are female (and 14% of them hold multiple positions) – there is a clear need for action to help women progress and help business realise the benefits.

Mentoring support has proved to be an effective tool for organisations proactively investing in their female talent. This can actually work on a number of levels; from one to one leadership support for women with potential; to women mentoring their male colleagues.

Forward looking companies are taking positive action to get the gender balance right. For example, senior male managers at computer firm Dell have now been mentored by their female colleagues in a bid to encourage diversity at the top of the business. This is all part of a wider project to get more women into top positions in the IT sector.

Blue Horizons offers leadership mentoring. Managing Director Jackie Waring has worked with many senior women, helping them develop their leadership ability and often progress into top leadership positions. Find out more...

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