Why gender diversity boosts firm performance

Research shows that a balance of men and women in senior leadership teams generates psychological safety.

by Stephen Jones

There’s plenty of evidence that firms which have a greater balance of gender diversity at their executive level tend to perform better.

The theory is that this is because more diverse teams are able to call on a wider range of perspectives and experience, and therefore make more informed decisions with less groupthink. 

However, rather than simply being the result of fishing from a wider pool, researchers from Cambridge’s Judge Business School, Hong Kong Baptist University and the University of Adelaide in Australia say they have identified a more specific reason: psychological safety. 

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