Contributing to Profitability and Competitiveness
A variety of market challenges are straining the bottom lines of a host of legacy industries. Changing global market conditions are intensifying competition among long-time industry rivals, while innovative new entrants shake up established business models. Consumers, particularly millennials and younger generations, are becoming more health-conscious and increasingly factoring environmental, social, and corporate governance considerations into their purchasing decisions, demanding less-harmful products and more sustainable corporate practices. Together, these factors are pushing companies to improve productivity and efficiency while evolving their business models toward addressing today’s critical environmental, social, and health challenges.
Increasing gender diversity could provide a means to respond to such pressures and enhance competitiveness and profitability. FPA’s company-level analysis reveals that a higher percentage of women in executive management is associated with higher profitability. Interviewees detailed how women are leading their organizations down new revenue-generating paths, advancing innovation in inertia-prone industries, and increasing transparency to build stakeholder trust.
Corporate Profitability by Quartile of Women’s Representation
The top-quartile companies with the highest percentage of women in executive management roles are, on average, 47 percent more profitable than those in the bottom quartile.