Companies have spent decades searching for ways to encourage employees to go the extra mile at work. Now, a new Korn Ferry survey raises questions on whether simply having women on boards may actually affect all that—at least in the financial sector.
According to a survey of large financial services organizations worldwide, those with at least one woman on the executive board had significantly higher levels of engagement among both male and female managers across all levels of management than those with all-male boards. The correlation is hard to prove but experts say industries with male-dominated leadership in particular may see a trickle-down benefit from this type of diversity. “Leadership diversity positively impacts engagement and enablement, which positively impacts performance,” says Jared Shorts, a manager at the Korn Ferry Institute.
In a new report “Inclusion at the top, engagement in the middle,” Shorts, along with colleagues Rebecca Masson, Ben Hubbard, and Ricky Marchaud, examined the gender demographics of 14 financial services firms. Although the overall employee makeup of the companies was nearly a 50-50 split, there was a major gap within management roles. Only 39% of lower-level managers were women, a figure that dropped to 30% of middle managers and just 17% of upper-level managers.
But despite the thinning of women in higher ranks, even just one female representative on the executive board made a dramatic difference in how engaged both male and female employees felt. At the five firms with at least one female board member, 75% of male senior leaders and 73% of female senior leaders felt engaged, considerably higher than the 69% of men and 68% of women at nine firms without a woman on the board. The gap was consistent at both the middle management and lower management ranks as well. The authors controlled for age, the firm’s revenue, headquarters location and other factors to ensure that no outside influences could explain the differences in engagement levels.
Shorts points out that the difference in engagement may not be a simple cause-and-effect relationship. Employees that are self-motivated to go beyond expectations may go out of their way to work for companies with a high engagement culture. Nevertheless, there’s considerable research showing how diverse boards can help create more engaging organizations. Leaders should be aware of the potential positive power of a diverse board as leaders search for new board members to replace the many Baby Boomers reaching retirement age.