For decades, gender-diversity advocates have made an argument that rests on two key points: 1) that gender diversity is good for business and 2) that companies need more women-friendly policies to achieve greater gender diversity. But this argument hasn’t worked: women still make up tiny fractions of chief executives, women consistently find themselves in lower-paying jobs and industries, and corporate boardrooms are still mainly full of men. At slow this rate of progress, it will take hundreds of years for women to achieve parity.

Perhaps the argument hasn’t worked because we tend to assume that if people need special help getting to power, it means they are inherently less competent. Generally, free market thinkers assume that businesses don’t need to be pushed to do things that are “good for business.” If companies have to be forced to do something, then investors and executives will generally assume it’s not good for the bottom line. Perhaps that’s why a recent study has shown that when quotas compel the appointment of more women to corporate boards, a company’s share price falls. Similarly, another study found that when women take high-profile CEO jobs, a company’s share price also declines.

At the same time, the skeptics of gender diversity—and, one suspects, the investors who may dump a company’s stock because they’ve just appointed a woman to the board—are overlooking something big: Leadership today is much less meritocratic than we think.

Consider: if people were promoted to leadership roles because of their talent, good leadership would be the norm. Instead, the reality is rather different: managerial competence is relatively rare. Around the world, the majority of leaders disengage and alienate their employees, to the point of pushing them into self-employment or entrepreneurship. The typical experience people have of their boss is quite dismal: just google “my boss is” and take a look at the auto-complete statements. People’s trust in their leaders continues to decline, despite organizations spending more and more on leadership development and recruiting.

Look around you, and you will likely see plenty of evidence that there is a difference between being in charge and being good at leading. We often put people in charge based on certain characteristics—narcissism, charisma, confidence—that are not really related to leadership effectiveness. For example, it’s a well-known piece of trivia that tall people are much more likely to be chosen as leaders. I’ve never seen evidence that tall people make better leaders.

Similarly, being a man is significantly advantageous for being chosen to lead, but does that mean that men make better leaders? While doing research for my latest book, I reviewed hundreds of studies on gender and leadership and found that at the individual level, men and women are close on most aspects of leadership potential, with no significant differences found for intelligence or general learning ability, as well as general leadership effectiveness.

However, there is a female advantage when it comes to transformational leadership, a style that is linked to higher levels of team engagement, morale, and productivity, as well as effectively rewarding individuals for their performance. Moreover, men tend to lead more autocratically and are more likely to be absent or laissez-faire leaders—two of the most counterproductive leadership styles. Women tend to be better communicators, have higher emotional intelligence, agreeableness, and extroversion, and lower levels of aggression, a pattern that is altogether associated with superior leadership capability. Despite this, women are consistently less likely to be promoted to leadership roles.

For example, consider a recent study in which sociometric badges (sensors) were used to monitor all the actions, movements, and communications of male and female employees. Researchers also looked at performance evaluations and other evidence. They found zero behavioral or performance differences between the genders—and yet women made up only 20% of senior leaders, despite making up nearly 40% of entry-level employees.

In sum, although the competence differences between men and women are typically small, they tend to favor women, which is completely out of sync with the substantial overrepresentation of men in leadership positions—unless we accept the obvious fact that the majority of leaders are not very good.

The assumption that policies promoting a more balanced gender ratio in leadership may harm businesses is based on the misconception that the current state of affairs is meritocratic. In fact, promoting people for their actual talents would lead to a slight surplus of women in leadership, even if our selection of leaders is gender-blind.

To get better at choosing their leaders, companies need to change how leaders are groomed and promoted. These changes would not only allow more women to advance, they would help men who don’t fit our assumptions about what a leader “should” be. The result would be a rising tide of leadership competence that really would be good for business.

Tomas Chamorro-Premuzic is Chief Talent Scientist at Manpower Group and Professor of Business Psychology at University College London and Columbia University. He’s the author of Why Do So Many Incompetent Men Become Leaders? (And How to Fix It).