Everyone knows that having women on a company’s board of directors is good for the company’s bottom line. (If you need a refresher, click on the business case, a free download on my website.) Catalyst did a study of companies with “sustained” high representation of women — at least three women board members in a minimum of four of five years studied. These companies significantly outperformed those with sustained low representation — 84 percent higher return on sales, 60 percent higher return on invested capital and 46 percent higher return on equity.
The Catalyst study indicates that what makes a difference to the bottom line is not having a woman but having women… plural. A 2006 study by Wellesley Centers for Women concluded that “a critical mass of three or more women can cause a fundamental change in the boardroom and enhance corporate governance.” When there are three, “women are no longer seen as outsiders and are able to influence the content and process of board discussions more substantially.”
This makes sense given the phenomenon that Sheryl Sandberg and Adam Grant addressed in their article “Speaking While Female.” If there is one woman, she may not speak up, she may be talked over, or her ideas may be credited to a man who repeats them. As a result, the feminine voice will not be represented. There is no real gender diversity. There is just a token. Read more here.