How board gender diversity reduces risk

🌈 Nasdaq's Board Diversity Rule is being challenged - why it is essential 🌈 The recent scrutiny by Republican attorneys general regarding Nasdaq's diversity rule raises concerns about inclusivity in corporate boardrooms. They are instrumentalizing the rule, calling it "quotas" purely for political gains and to ride "anti-woke" sentiments. At the Association of LGBTQ+ Corporate Directors, we firmly believe that the Nasdaq rule is necessary and a game-changer for creating more diverse, innovative, and resilient leadership teams. 🏳️🌈 Our 2024 Board Monitor Report, released two weeks ago, demonstrates that companies with #LGBTQ+ and other diverse board members perform better, driving enhanced decision-making and shareholder value. Yet, LGBTQ+ individuals hold only 1.3% of board seats on Nasdaq-listed companies—a stark underrepresentation considering our community's significant contributions. 📊 Now a new report from E.L.F. BEAUTY, in partnership with North Carolina A&T State University, reveals that S&P 500 companies with diverse boards outperform their less diverse counterparts. Released on October 7, the "Not-So-White Paper" draws on five years of data, showing that companies with greater gender and racial diversity in boardrooms have a 15% higher return on equity and a 50% reduction in earnings risk. This rule provides transparency and accountability—two factors critical to fostering a more inclusive corporate culture. Without it, we risk losing momentum on crucial gains made in LGBTQ+ visibility and leadership. 🏳️⚧️ Read the full story here on how this fight could reshape board diversity across the U.S.: https://lnkd.in/e_i3b6mx #BoardDiversity #Disclosures #Governance

I’m encouraged by Apple’s board decision to vote against eliminating DEI efforts, following Costco Wholesale’s similar stance. These decisions reflect an important truth: diversity, equity, and inclusion (DEI) aren’t just ethical imperatives—they’re also strategic advantages. DEI disrupts groupthink, fosters innovation, and drives better business outcomes. Boards with at least 30% women make stronger decisions, recall faulty products faster, and achieve better governance. Malcolm Gladwell describes this in Revenge of the Tipping Point as the “magic third”—the threshold where diverse representation begins to transform outcomes. Yet, a scarcity mentality often stands in the way of progress. Yes, there are only so many board seats, but seeing a woman in one of them doesn’t mean she “took” that seat from a man. The assumption that board seats naturally belong to men is deeply flawed and ultimately bad for business. Companies that believe men are the default for leadership are limiting themselves—and their growth potential. There is room at the table for both men and women. Consumers come from diverse backgrounds, and inclusive boards with varied perspectives are far more likely to make decisions that resonate with their markets and position companies for long-term success. As a member of the Silicon Valley Executive Board for How Women Lead and the Get On Board Week committee, I’ve seen how essential it is to challenge stereotypes and prepare women for board service. Women often have the governance, advisory, and leadership skills boards desperately need, but outdated perceptions can prevent them from being seen as “board-ready.” Breaking those barriers benefits everyone. Apple and Costco’s commitment to DEI sets an example of how embracing diverse voices leads to stronger businesses and a better society. Let’s keep making room at the table, because when everyone has a seat, we all win. https://lnkd.in/g7--VyVB #Leadership #DEI #DiversityInBoards #HowWomenLead #WomenonBoards #RepresentationMatters #GetOnBoard

Increasing women’s representation in business leadership is a strategic priority for the World Bank. That’s why I’m excited to see the release of this new thematic brief on the subject: https://lnkd.in/eTesFPpR.   The brief benefits from the contributions of our IFC Women on Boards and in Business Leadership team and represents strong collaboration with our World Bank colleagues to highlight the challenges and opportunities, including interventions with promise, to increase women’s representation in business leadership.   Key takeaways showcase that: 1. Women hold less than 20% of corporate board directorships and only 5% of CEO positions globally. Women are also less likely to have roles that are stepping-stones to the CEO role, such as chief operating officer, head of sales, or CEOs of subsidiaries. 2. Yet, companies with more gender-diverse leadership show a stronger commitment to inclusive growth, broader stakeholder focus, and good ESG practices, contributing to better financial performance, reduced business risk, greater resilience, and enhanced sustainability. Moreover, increasing the presence and amplifying the voices of women in senior public and private sector leadership will accelerate progress on the SDGs. 3. Barriers that narrow women’s leadership paths, especially in emerging markets, include biases and stereotypes; non-inclusive hiring, retention, and promotion processes; lack of access to professional development, mentors, role models, networks, and connections; and unsuitable work environments and safety concerns about gender-based violence and harassment. 4. Based on IFC and World Bank experience, interventions that address the root causes of gender gaps in enterprise leadership demonstrate promise. All levels of market ecosystems, including capital markets, private equity, venture capital, regulators, investors, financial institutions, and companies themselves, have important roles to play in balancing gender scales in leadership.   I’d also note that increasing women in leadership is a strategic priority of the World Bank’s latest Gender Strategy for 2024-2030, currently open for your feedback. If you haven’t already, share your comments on the strategy here: https://lnkd.in/exw4dZzj #accelerateequality #esg #womenleaders #womenbusinessleaders #dei

Kevin O’Leary recently made a bold statement: 𝐰𝐨𝐦𝐞𝐧 𝐚𝐫𝐞 𝐛𝐞𝐭𝐭𝐞𝐫 𝐦𝐚𝐧𝐚𝐠𝐞𝐫𝐬 𝐭𝐡𝐚𝐧 𝐦𝐞𝐧 𝐚𝐧𝐝 𝐠𝐞𝐧𝐞𝐫𝐚𝐭𝐞 𝐛𝐞𝐭𝐭𝐞𝐫 𝐫𝐞𝐭𝐮𝐫𝐧𝐬 𝐨𝐧 𝐜𝐚𝐩𝐢𝐭𝐚𝐥. He attributes this to better risk mitigation and diversification— crucial factors in long-term business success. And he would know. Kevin is a billionaire investor, entrepreneur, and Shark Tank star, renowned for making sharp business calls. As the founder of O’Leary Funds and O’Leary Ventures, he has invested in hundreds of companies, analyzing what drives profitability and long-term success. So I will say he 𝘮𝘢𝘺 be right. But here’s the thing: women shouldn’t just be given better management positions—they should be given a seat at the table to lead. We often hear about the benefits of diverse leadership, yet many organizations still hesitate to put women in decision-making roles where their strategic and risk-conscious approach could drive real impact. As Kevin suggests, this isn’t just about fairness—it’s about better business outcomes. The data is clear: companies with diverse leadership teams outperform their peers in profitability, innovation, and resilience. If we truly believe in maximizing returns and mitigating risks, the solution is simple: More women in leadership, more women in the boardroom, and more women at the helm of investment decisions.