Women in developed economies have made substantial gains in the workplace during recent decades. Nevertheless, it’s still true that the higher up in a company you look, the lower the percentage of women.

But some companies have moved successfully to increase the hiring, retention, and promotion of female executives. Their initiatives have included efforts to ensure that HR policies aren’t inadvertently biased against women or part-time workers, to encourage mentoring and networking, to establish (and consistently monitor at a senior level) targets for diversity, and to find ways of creating a better work–life balance. Changes like these have a price, but there are business advantages to making them—above and beyond the branding benefit that might accrue to companies viewed as socially progressive.

Research in Europe and the United States suggests, for example, that companies with several senior-level women tend to perform better financially. Hiring and retaining women at all levels also enlarges a company’s pool of talent at a time when shortages are appearing throughout industries.

Why women matter

Few women become executives. Across the European Union, women account for only 11 percent of the membership of governing bodies such as boards of directors and supervisory boards, our research has...