A recent Harvard Business School study demonstrates added reasons to support the need for more women managers in the workforce. Ineffective management-employee communication may result in low output and disgruntled clients. However, the study found that women managers are more suited to foster positive relationships among mixed-gender teams, which improves organisational performance and increases staff retention.
Harvard Business School researchers examined information from a Colombian fast-food franchise. They discovered that when cisgender men and women each handled people of their own genders, women outshone men in terms of rapport, making optimal schedules, looking after the interest of coworkers, and setting and achieving goals.
According to the study, women are under-represented in management positions across nearly all industries. This substantiates to the body of evidence supporting the idea that increasing the number of women in leadership roles can boost output.
The proportion of women in corporate leadership has been gradually increasing on a global scale, including in India. An important milestone was the requirement for listed corporations to include at least one woman on its board, known as the ‘woman director’ mandate under The Companies Act, 2013 in India. The proportion of listed companies without any woman member on board plummeted from 53 per cent to less than 10 per cent in just one year. Notwithstanding these advancements, as of 2021, India’s average proportion of women on boards is 17.1 per cent, well below the 19.7 per cent global average and significantly less than that of France, the nation with the highest performance rate at 43.2 per cent (Deloitte, 2022).
The proportion of women in middle and senior management positions is likewise abysmal in India, at only 17 per cent in 2019. Global figures (ILOSTAT, 2024) demonstrate how under-represented women are in these roles. To put this into perspective, the global average is 32.8 per cent, while the average for advanced nations is 32.4 per cent. India is falling behind other Asian emerging countries, which outperformed it by 27. 2 per cent in 2019 and are ahead of India by more than 10 percentage points. Nevertheless, from a low starting point, the proportion of women in the workforce rose by about 40 per cent between 2010 and 2019.
Increased representation of women in corporate leadership can improve organisational culture and the performance of the company through a number of different mechanisms. First, more diversity of thinking on boards with mixed gender compositions enhances corporate governance. Women’s network centrality increased as a result of serving on several boards in accordance with the mandate. This has been shown to help firms share corporate strategies and information, which improves firm outcomes. Boards with higher proportions of women are more likely to adopt HRD policies that help company personnel, which could enhance organisational culture and worker wellbeing.
We track the state of gender-inclusive corporate leadership and examine its impact on Indian companies' financial performance and corporate culture by utilising the Companies Act, 2013's woman director’ mandate. Research indicates that, on average, companies were appointing more women than the Act required. This suggests that the government's signal to support women-led development has had a beneficial effect and that companies have profited from hiring more women directors. Simultaneously, women were younger and more educated than males when they were first appointed, and they had a much higher ‘stretch factor’ (the average number of directorships) than men did.
Second, we discover that large- and medium-sized businesses perform better economically and have less financial risk when at least one woman is on staff. Furthermore, we find that a higher percentage of women in board positions is positively correlated with employee ratings and sentiment scores using nearly 400,000 employee reviews that were scraped from a company review platform. However, the relationship becomes significant only when there is at least one woman in the top management. This strengthens the business argument for corporate India to place more women in C-Suite roles and on boards.