Everyone knows that having women on a company’s board of directors is good for the company’s bottom line. Research shows that a critical mass of THREE women results in better corporate governance. Less likely to feel like an outsider, a woman is more likely to speak up and be heard when she is one of three. Good decisions and good results follow from a balance of feminine and masculine strengths. Knowing this, leaders should not be satisfied with one (token) woman. Yet a new study shows that, at the executive level, most companies have just one woman. They have “checked the box.” With only one woman, they may miss out on the value of true gender diversity.
Why do companies with women on their boards get better financial results and have higher stock prices? A recent New York Times opinion suggests it is because women make better decisions under stress. There are both masculine and feminine approaches to making decisions. When there is gender diversity in a group, it is more likely that there will be both kinds of decision process. It is the balance of these approaches to making decisions that explain better outcomes. Having women on boards enables this balance.