Breaking Boardroom Barriers: Private Equity Needs More Women in Leadership

Although significant strides have been made toward gender equality, women remain underrepresented in corporate leadership. According to a 2021 Catalyst report, women comprised 26% of all CEOs and managing directors globally. Compared to only 15% in 2019, there seems to be strong progress toward equity. That progress is the result of breaking down the persistent barriers many women with powerful executive abilities face. And it must continue.

Companies that fail to prioritize female leadership miss out on the unique perspectives women bring to the boardroom. These perspectives translate into real business advantages, driving innovation, enhancing decision-making, enriching stakeholder relationships, and improving financial performance. Here’s what hiring managers should be actively thinking about to continue driving progress toward DEI goals and core business growth.

Women in the boardroom: A business case

Research consistently shows that diverse leadership teams outperform those lacking diversity. A 2020 McKinsey report found that companies in the top quartile for gender diversity were 25% more likely to have above-average profitability than those in the bottom quartile. Similarly, a Boston Consulting Group study revealed companies with more diverse leadership reported innovation revenue 19% higher than those with less diversity.

Why do female leaders drive these results?

Gender diversity fosters a variety of viewpoints and experiences, encouraging creative problem-solving and reducing groupthink. Women in leadership positions often bring a different approach to risk management, strategy, and innovation. This difference can promote better decision-making, and it enhances organizational agility along the way.

Yet, even with this business case, women continue to encounter structural barriers, such as exclusion from informal networks, gendered expectations, and unconscious bias.

So, what needs to change?

Breaking structural barriers

To build more inclusive boardrooms, organizations must actively dismantle the structural barriers that prevent women from advancing. Here’s how businesses can do that:

1. Rethink recruitment strategies.

Traditional recruitment approaches often fall short in reaching diverse talent pools. Companies must broaden their search for female board candidates by seeking talent with nontraditional backgrounds, including those with cross-functional experience, entrepreneurial backgrounds, or leadership roles in nonprofit or academic sectors.

Businesses should also evaluate their current recruitment criteria. Are they unintentionally favoring male candidates due to outdated assumptions about leadership qualities? Eliminate bias in the hiring process to ensure the best candidates — regardless of gender — are always identifiable.

2. Invest in leadership development for women.

Organizations need to cultivate talent by offering targeted leadership development programs. This includes formal mentorship, executive coaching, and access to senior leadership networks that are often critical for career advancement. Sponsorship programs — where senior leaders actively advocate for women’s promotions and board appointments — can go a long way toward breaking cycles of underrepresentation.

It’s also important to provide opportunities for women to develop the specific skills required for boardroom roles, such as corporate governance, financial oversight, and strategic decision-making. These programs create a pipeline of women leaders ready to step into senior executive and board positions when opportunities arise.

3. Build inclusive board cultures.

Businesses must actively work to foster a culture where diverse viewpoints are respected and encouraged. This includes creating a board environment that welcomes new perspectives, acknowledges unconscious bias, and challenges the status quo when necessary. Boards should establish transparent processes for decision-making and conflict resolution that prevent dominant voices from monopolizing discussions. The goal is to create an environment where women can contribute fully and be recognized for their insights and leadership abilities.

4. Commit to measurable goals and accountability.

Companies that commit to measurable diversity goals are more likely to see progress. Setting specific targets for female representation on boards and regularly reporting on these metrics creates accountability, which is a great start. But it’s also important to measure efforts toward resolving unconscious bias and cultural barriers. Surveys and focus groups can quantify the outcomes of DEI commitments beyond hiring quotas.

Barriers to women are barriers to growth

When women hold leadership positions, they inspire broader social and cultural changes that align with business objectives. Boards with female leaders are more likely to promote gender equality throughout the organization, implement family-friendly policies that enable operational flexibility, and support moves toward long-term sustainability and ESG initiatives. All of these areas of business have become increasingly valuable to consumers and investors.

Plus, companies with diverse boards are better positioned to reflect and serve their customer bases. Female consumers, who often make the majority of purchasing decisions, are more likely to engage with brands that align with their values. By prioritizing gender diversity at the highest levels, companies not only benefit internally but also build stronger relationships with their customers.

Find your firm’s leaders with hireneXus

Breaking barriers for women in the boardroom makes business sense. Companies that take deliberate, strategic action to increase female representation at the top are rewarded with stronger leadership, better decision-making, and enhanced innovation.

At hireneXus, we specialize in identifying and recruiting top female executives who can drive transformation at the highest levels. And we’re excited to continue playing a critical role in progress toward boardroom and executive gender equity.

Contact us to enrich your firm’s leadership and business outcomes.