The benefit from gender diversity – just a delusion?
The call for more diverse board members and leadership-teams is on everyone’s lips. It is said that companies are able to perform better, be more innovative and will outperform their peers if they increase their diversity. These arguments – at least the gender diversity aspects –are massively challenged by Mike Buchanan, author of the book “The Glass Ceiling Delusion: The real reasons more women don’t reach senior positions”
Mike Buchanan looked at some studies and surveys and found out, that they were not able to find causal links between the higher proportion of women on management committees and a better performance of these companies. Furthermore he found studies which detected deterioration in performance when a women’s quota is targeted and another study that stated that younger executive teams as well as a higher proportion of female executives lead to higher risk taking. Thus the message of Mike Buchanan is clear: The proclaimed benefit of gender diversity is a delusion!
Is he right? If we consider the arguments in more detail theses statements are not as profound as it seems at the first moment but a very one-sided and reduce view of the cited studies. For example one study he quoted proved that companies with a higher proportion of women on their management committees are the ones with the best performance. The poorer corporate performance again could also be due to the inexperience of the younger board members and not attributable solely to the sex. Anyhow – are there facts and figures, studies or surveys which show a significant and causal link, that companies with men in the top management steadily make more profit, perform better or generate more revenues than companies with mixed leadership teams?
With these arguments of delusion in mind another call is even more interesting. Also recent research of McKinsey shows, that companies with diverse executive boards enjoy signiﬁcant higher earnings and returns on equity. As here only gender and international differences are considered Dr. Gregersen, Professor of Leadership at the Business School INSEAD, even goes further and recommends diversifying diversity. He believes that even better results can be made – especially concerning the innovation capacity – when not only (or mostly) gender and culture are focused but every kind of diversity is promoted. As in today’s fast moving environment the management teams of companies need to generate innovative or even disruptive strategies, different perspectives, various experiences and open communication which reflects different opinion is needed.
Delusion or a further need to diversify – what do you think?