The Business Case for Diversity
Top consultants make the case for diversity and inclusion
Leaders working to create diverse and inclusive workplaces must make the connection between diversity initiatives and organizational goals. These resources make the business case for diversity with recent data and empirical research.
Catalyst is the leading nonprofit organization with a mission to expand opportunities for women and business.
Catalyst’s Bottom Line research series explores whether there is a link between gender diversity and corporate financial performance. This research series has shown that:
- Companies that achieve diversity in their management and on their corporate boards attain better financial results, on average, than other companies.
- Companies with the most women board directors outperformed those with the least on return on sales by 16 percent and return on invested capital by 26 percent.
- Companies with sustained high representation of women—three or more women board directors in at least four of five years—significantly outperformed those with no women board directors.
Catalyst’s Why Diversity Matters grounds the business case for diversity in solid research, with recent data to build an organizational business case for diversity and inclusion. This tool explores four pillars of the business case:
- Improving financial performance
- Leveraging talent
- Reflecting the marketplace and building reputation
- Increasing innovation and group performance
It provides readers with recent data to use in their efforts to build an organizational business case for diversity and inclusion.
McKinsey & Company Reports
McKinsey & Company is a global management consulting firm. We are the trusted advisor to the world’s leading businesses, governments, and institutions.
The Women Matter study, published in 2007, aims at assessing the impact of gender diversity on companies’ performance. It shows that the companies where women are most strongly represented at board or top-management level are also the companies that perform best, on both organizational and financial performance.
It also offers fact-based insights into the importance for companies of fostering the development of women in the business arena, so that a greater number attain positions of high responsibility. Finally, having identified the main barriers to female representation on management bodies, this study suggests paths, based on good practices, to “reinvent the model” and increase women’s participation in business as well as in top executive positions.
This report, published in 2008, aims at understanding how exactly female leaders contribute to improve corporate performance, and whether their specific contribution is a key factor in meeting tomorrow’s business challenges.
Focusing on leadership practices in corporations, Women Matter 2 shows that the leadership behaviors more often applied by women reinforce a company’s organizational performance on several dimensions. Moreover, a survey involving over a thousand managers from a wide range of companies reveals that these leadership behaviors—in short supply in today’s corporations—will be critical to meet the expected challenges companies will face over the coming years. Women Matter 2 advocates for more women in management positions and defines clear courses of action to develop gender and leadership diversity in business organizations.
The aim of Women Matter 3, published in 2009, was to understand how gender diversity in companies was evolving – how the global economic crisis might have affected the programs and priorities of female executive development – and to identify whether the leadership behaviors more often adopted by women were still appropriate in times of crisis and beyond.
This study is based on a survey of about 800 business leaders, representing all industry sectors, all levels of responsibility, and all regions of the world. The results reveal that the crisis has not altered firms’ priorities with regard to gender diversity. On the other hand, our findings show that only one-third of the firms surveyed view gender diversity as one of their priorities at all.
This report also confirms that certain leadership behaviors more frequently adopted by women are critical to navigate through the crisis safely and to perform well in the post-crisis world. Lastly, as companies tend to implement piecemeal approaches to develop female executives, Women Matter 3 recommends that companies should follow the example of the most advanced firms in order to accelerate the progress of gender diversity.
The 2010 Women Matter study provides a focused analysis on how to achieve gender diversity at top management level. Its findings are partly based on a survey of about 1,500 business leaders worldwide across all industries, from middle managers to CEOs. The survey concretely reveals that a majority of leaders, both men and women, now recognize gender diversity as a performance driver, while also showing that actual implementation of gender-diversity measures in corporations remains limited.
This is not surprising as the achievement of gender diversity is not at the top of – nor even on – companies’ strategic agenda: only 28 percent of respondents identified this as a top-10 priority in their company. This is a concern, as the new McKinsey study shows a link between having gender diversity as a top priority and achieving women representation in C-level positions (CEO, COO, CFO, etc.).
The study finally identifies those measures that tend to be more effective in increasing women representation, highlighting in particular the impact of CEO commitment and women’s individual development programs.