Catalyst, a nonprofit organization with a mission to expand opportunities for women and business, issued a report this year titled “Why Diversity Matters” that provided data supporting the business case for diversity and inclusion.
According to the report, a 2007 Catalyst study found that companies with the highest percentage of women board directors outperformed those with the lowest on three financial measures: return on equity (53 percent higher), return on sales (42 percent higher), and return on invested capital (66 percent higher).
In another study, this one looking at more than 150 German firms over five years, researchers confirmed that boards need a critical mass of about 30 percent women to outperform (as measured by return on equity) all-male boards. This translates into a “magic number” of about three women, on the basis of mean board size, according to the report.
Other researchers examined stock prices after the appointment of women to senior leadership positions in U.S. companies and found that investors responded positively, especially when the company was in a female-dominated industry. The naming of men to senior leadership positions did not lead to the same significant positive impact on stock prices. Furthermore, the study found no evidence that female appointments caused share prices to suffer.
Closer to veterinary medicine, a 2011 study, “Women in Grassroots Leadership: Barriers and Biases Experienced in a Membership Organization Dominated by Men,” by Eric K. Kaufman and Pat E. Grace (Journal of Leadership Studies 2011;4:6-16) looked at leaders in a subgroup of the American Farm Bureau Federation.
According to the study: “Among governing boards traditionally dominated by men, the presence of women is becoming more common. However, these women may face prejudices and discrimination that prevent them from feeling and ultimately being successful.” Interviewees revealed that they believed gender-related obstacles were preventing them from being effective leaders. Four noteworthy themes emerged, according to the study: persisting stereotypes and bias, separation and isolation, desire for change, and potential for added value. In response, the authors recommended that organizations and practitioners become more intentional and completely implement related goals throughout the leadership development process.