Why does gender matter for the private sector?
Regardless of the professional field or type of business activity, mainstreaming gender equality in the workplace is crucial for companies to develop and maintain high performing teams as well as boost their profitability. In 2016, after conducting a lengthy study of 22,000 private for-profit companies globally, the Peterson Institute for International Economics released a report that showed having at least 30% women within the ranks of top executive management (CEO, the Board and other C-suite positions) resulted in a 15% increase in profitability for a typical firm. There are two main reasons for the discrepancy: increased skill diversity within top management, which increases effectiveness in monitoring staff performance, and less gender discrimination throughout the management ranks, which helps to recruit, promote, and retain quality talent. Many other studies conducted since further support these findings. As one example, the "Women on Boards" study performed by MSCI (Morgan Stanley Capital International) found that companies in the MSCI World Index (stock market index of world stocks) with strong female leadership generated a Return on Equity of 10.1% per year versus 7.4% for those without.
Because gender-biased firms do not reward employees with responsibilities based on their talents, and do not create positive work spaces where women feel equally valued, they lose out to rivals that do not discriminate. This lack of gender diversity fundamentally and powerfully affects their bottom line. Private sector companies should care about gender equality in the workplace, not only because it is the right thing to do, but also because it’s just good business.