The Business Case for Gender-Inclusive Leadership Teams

Despite making gains, women are still underrepresented in the C-suite. A new report from Slayton Search Partners says that organizations must leverage gender-inclusion initiatives to unlock the full potential of diverse executive teams. The firm’s Molly Hull breaks it all down.

April 9, 2024 – The power of women in leadership has been widely documented over the past decade. When companies appoint more women to senior positions, research shows profitability grows, openness to change rises, and customer experiences improve. It’s no surprise that global organizations are strengthening diversity initiatives, seeking equal gender representation in leadership roles—and increasingly, companies are recognizing the business-critical need for inclusion in the C-suite, too, according to a new report from Slayton Search Partners’ Molly Hull.

“Building gender-inclusive leadership teams, which embrace the contributions of men and women equally, has not only become a moral imperative but also a strategically advantageous move for business,” Ms. Hull said. “To unlock the full potential of diversity, organizations can no longer call upon a small number of leaders to create an inclusive environment; every executive must be invested in driving inclusion and belonging.”

Women in leadership have made some progress over the past decade. Between 2015 and 2023, McKinsey reports the number of women in the C-suite jumped from 17 percent to 28 percent, and representation at the VP and SVP levels also saw significant improvements. Today, diversity-leading companies in the U.S. boast executive teams with 50 percent women and 39 percent historically underrepresented ethnicities.

“However, these advancements conceal deeply rooted inequities,” Ms. Hull said. “Diversity has increased—but women in leadership are burning out.” According to SHRM, those who achieve director and senior director positions become less likely to recommend their company as a great workplace for women than earlier in their careers. Genderism, or bias resulting from a gender binary view, plays a considerable role in women’s dissatisfaction. Nearly 50 percent of women still experience microaggressions that call their competence into question, creating hostility in their working environment. Additionally, an MIT Sloan study found women are 14 percent less likely to receive promotions than men despite receiving higher average performance ratings. The persistent gender wage gap further exacerbates inequities on leadership teams.

Related: Identifying and Landing a Board Seat for Women

“What’s more, the progression of women of color remains stunted,” Ms. Hull said. “Digging into the data, it becomes clear that this demographic remains severely underrepresented in leadership roles—even compared to men of the same ethnicity and race—especially in C-level positions. White women have been the primary beneficiaries of recent advancements.”

Molly Hull is executive vice president with Slayton Search Partners. She began her career with the firm as a research associate in 2008, progressing through various levels of responsibility. Ms. Hull has been a key contributor on searches across a number of industries including manufacturing/industrial, consumer, and financial services. In addition, she has worked across a broad spectrum of functional disciplines including finance, human resources, sales, R&D, IT, and supply chain among others.

“The inequitable barriers faced by women climbing the corporate ladder point to a critical need for gender-inclusive leadership teams, according to Ms. Hull. “Beyond hiring diverse managers and executives, companies must actively engage, promote, and value contributions from women in leadership,” she said. “Organizations can only unlock the full potential of their gender-diverse workforce when an inclusive environment and fair compensation is in place.”

Gender-Inclusive Leadership Teams

Ms. Hull explains that diversity without inclusion can create disparities in real and perceived progress. Even on leadership teams that boast equal gender representation, women may still experience disproportionate levels of stress, mistrust, and resistance to salary increases—all of which can undermine their performance and well-being. Without inclusion, top-performing leaders lose incentive to stay, according to Harvard Business Review.

On the other hand, Ms. Hull notes that inclusion builds a sense of belonging that drives individual and organizational success—and it can inspire employees to become highly dedicated team members who stick with your business long-term. According to Deloitte, belonging can spark a 50 percent reduction in turnover risk and a 75 percent decrease in the use of sick days. Additionally, it can enhance job performance by 56 percent. “When women in leadership feel their voice is respected and valued, they’re empowered and motivated to contribute their diverse perspectives and express their creativity,” Ms. Hull said.

True diversity of thought, which is only possible in a culture of inclusion, drives innovation and strengthens decision-making processes. Ms. Hull points to PepsiCo, who offers an excellent example of the organizational impact of empowered women in the C-suite. When Indra Nooyi became the first female CEO of PepsiCo, she was challenged with declining market shares across the company’s portfolio. In response, she introduced design thinking, enhancing not only the impact of packaging but the entire user experience—even developing tidier products with plastic trays catered to how women statistically prefer to snack. “This design-oriented approach led to a steady increase in revenue and stock prices during her tenure,” Ms. Hull said.

Related: Aligning Diversity and Talent in Board and C-Suite Recruitment

Gender diversity is already linked to ever-increasing profitability with companies with the strongest representation of women on executive teams are now 39 percent more likely to financially outperform those with the weakest representation—up from 15 percent in 2015, according to Harvard Business Review. As global organizations increasingly focus on diversity, inclusion and belonging will become core differentiators for leadership teams, according to Ms. Hull.

Overcoming Critical Barriers to Gender-Inclusive Leadership

“The road to gender-inclusive leadership certainly has its challenge,” Ms. Hull said. “Tackling pay inequities and unconscious biases requires significant cultural and organizational shifts that drive transparency and accountability. Business leaders—in particular, chief diversity officers and CHROs—must set measurable objectives and begin tracking progress toward gender parity.”

The recruitment process must be addressed by reforms, Ms. Hull explains. She says that unconscious biases often present themselves within the hiring process, even as early as the resume screening stage. A Greenhouse survey found 22 percent of job candidates have used a different name on resumes to sound like the opposite gender, and 24 percent have been asked discriminatory questions about their gender. “Leaders must uncover the key stages of hiring that drive disparities within their executive teams,” Ms. Hull said. “And they must implement inclusive recruitment strategies—such as blind hiring, standardized interviews and candidate scoring, and diverse interview panels—to reduce those weak points and give women a fair shot at leadership positions.”

Women Returning to Workforce in Droves
For the better part of the past three years, professional women have been challenged with significant gender equity setbacks. Slayton Search Partners’ last analysis of women in the workforce revealed a dismal state; in 2022, female workforce participation was at its lowest in 33 years. “Women were burning out and leaving the labor force at far higher rates than men,” said Slayton Search Partners’ Molly Hull said in a recent report. “As a result, many experts predicted a long road to recovery—but women are proving them wrong.”

Ms. Hull also notes that companies must mitigate biases within performance evaluations and promotion processes, as well. “Well-defined evaluation criteria, especially those that enable the use of objective data, are key to ensuring women can advance their career and receive the compensation they deserve,” she said. “Creating a work environment that attracts and retains women in leadership is another challenge.”

A report from USA News found that mothers are disproportionately affected by childcare responsibilities, which often present a significant barrier to demanding executive positions. “Onsite childcare can help,” Ms. Hull said. “However, companies can also leverage flexible work arrangements, which enable employees to work around school schedules and appointments, to encourage qualified women to return to the workforce and pursue leadership roles. Hybrid work can in fact have a significantly positive impact on diversity, equity, and inclusion (DEI) efforts throughout the organization. And it can create a better work-life balance for all employees.”

Building gender-inclusive leadership teams is not just a matter of fairness; they are integral to driving organizational success and achieving sustainable growth, according to Ms. Hull. “Strong gender-inclusion initiatives empower businesses to realize the benefits of diversity in leadership, such as improved decision-making and increased financial performance,” she says. “As companies strive to remain competitive, fostering a culture of inclusion—particularly on executive teams—will be critical to unlocking innovation. Diverse perspectives at the highest level can enable breakthrough products, services, and processes, as well as greater organizational resilience. Businesses that proactively implementing inclusive hiring and promotional strategies now can transform their long-term trajectory for the better.”

Related: Diversity, Equity, and Inclusion’s Role in Senior Leadership

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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