According to Accenture companies that recruit employees from the widest possible pool of talent enjoy an advantage in an increasingly competitive global economy. But it’s not just a diverse workforce that helps put companies ahead.

Top leadership teams drawn from across nationalities, genders and professional backgrounds also contribute significantly to the organisation’s performance.

Accenture recently investigated what constitutes successful leadership across various industries and found that there were significant differences in the degree of diversity in respective companies.

The research shows a significant correlation between both gender and the international diversity of a company’s executive board and stock market performance. Companies with more women among top managers not only provided better returns to stockholders, but were also more profitable.

“We found, on average, that the more diverse a company’s executive board, which we define as the team of top managers who actually run the business, in terms of age, gender, nationality, education and other characteristics, the more successful the company.

In addition, we found that companies can boost profitable growth if they strive to ensure a mix of youth and experience in their leaders, as well as a diversity of educational and professional backgrounds,” says Sandy Mohonathan, Human Resources Director at Accenture South Africa.

Diversity, of course, makes sense in an increasingly complex and global environment. CEOs are still the public faces of their companies, but successful leadership requires the collective efforts of the entire upper echelon of executives.

That team also needs to understand, embrace and act on an amalgam of viewpoints, constantly questioning established ways of doing things and providing an antidote to the groupthink that stymies innovation.

“Younger newcomers, for example, often bring new ideas to the board, but the fresh thinking that fuels innovation needs to be both realistic and marketable. More experienced executives may be better placed to evaluate a new idea’s potential. Hence the importance of ensuring a balance between graybeards and greenhorns on the management team—and that they get along,” says Mohonathan.

It’s a similar story with gender. A lone woman on the board could be viewed as a token, resented by her peers and too isolated to make an effective contribution. Better to have several women—ideally with diverse professional backgrounds.

“The real concern is that three out of every four of the companies we investigated still have exclusively male executive boards; despite the fact that successful diversifiers are rewarded by higher stock prices and profitability.

The link between diversity and high performance is clear—and in a global world it is likely to grow even stronger,” says Mohonathan.

---

Share this article