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This Mistake Is Costing Companies $655 Billion in the U.S., UK, and India

3 minute read

Excluding women from board positions has a cost—a $655 billion cost, to be exact.

That’s according to a new report from Grant Thornton, an international audit, tax, and advisory firm. According to the firm’s research, excluding women from company boards costs companies $655 billion in the US, the UK, and India, which amounts to a total of 6.7% of lost GDP across all three countries. The Grant Thornton reports looks only at big, listed companies, but notes that the value lost in smaller and mid-sized companies is “unquantifiable” but potentially huge.

This report comes after a McKinsey Global Institute report last week found that the global GDP would increase by $28 trillion by 2025 if women participated equally in the labor force, an opportunity cost equivalent to the combined GDPs of the U.S. and China, the world’s two largest economies.

Still, getting a diverse company board is easier said than done. The common standard is 30% female representation, a number that’s been adopted by Germany and other countries as a quota for the boards of major companies. In the absence of legislative quotas, getting more women appointed to board positions involves changing hearts and minds of those who run the company. That means progress has to be made one company at a time.

Helena Morrissey is the CEO of Newton Investment Management, mother of nine kids, and founder of the 30 Percent Club, a UK organization dedicated to making sure all companies in the FTSE-100 have boards composed of 30% female by the end of 2015. (The organization is not affiliated with the new research out of Grant Thornton.) When the it started in 2010, UK female board representation was 12.5%. Now, it is 25.4%. “The 30 Percent Club did not get off to a great start,” Morrissey says. “I mean it was great timing and we got some early supporters, but I also had a lot of push back from people who felt I was interfering with boards and it was a women’s issue, not a business issue.”

Morissey says that despite her later success, she has personally experienced how difficult it can be for women to advance in a workplace culture that doesn’t show them a path upwards. After she had her third child at 25, she returned from maternity leave and was immediately passed over for a promotion, even though she had been “in this fast track” before she left. “I asked my boss why and what I needed to do to perform better or where I was going,” she says. “And he basically said, ‘Oh, you just had a baby.'”

“I realized that actually what was happening around me was unjust,” she adds. “I had to face up to the fact that the culture in the firm where I was at the time was probably not conducive to me realizing my ambitions.” She left that firm shortly afterwards and joined Newton, where she rose from a junior position to Chief Executive in 7 years.

According to the Thornton report, diverse boards outperform all-male boards by 1.9% in the U.S. and by 0.5% in the UK in financial terms, but most of the women board members counted for this survey are in a non-executive role. Of the 1,050 companies surveyed in all three countries, only 127 had female executives.

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Write to Charlotte Alter at charlotte.alter@time.com