Want economic growth? Add female executives and board members
April 18, 2019
March 8th was International Women’s Day and this year’s theme was #BalanceforBetter. As the topic of gender imbalance in the workforce continues to be widely discussed, the reality is that the rate of change is still incredibly slow. Reports from the Global Gender Gap Index claim it will take over 217 years to achieve gender balance at the current rate of change. Further, over the last decade the proportion of women leaders increased by an average of just over two percentage points across the 12 industries studied; while women make up 55% of manager level employees, they only represent 19.2% of board members and a small 5% of CEOs.
If we consider these stark findings against the backdrop of numerous studies that point to the undeniable value that gender parity brings about for big business and the global economy, it seems fairly shocking that such an imbalance remains today.
A recent report by the Peterson Institute for International Economics and EY found a correlation between women board membership and higher profits, and according to a study by McKinsey, it is estimated that gender parity could add $12 trillion to the global economy. In addition, Grant Thornton research found that companies with women on their boards outperform those with all-male boards, leading to an opportunity cost of $655 billion a year in the U.S., U.K. and India alone.
Michelle Gallaher, who is the newly appointed CEO of ShareRoot, said recognizing the bias that still exists against women is the first step. “If we cannot see the wider problem and how it impacts socially and economically on economies, communities, families and individuals then it’s virtually impossible to bring about change. We should never underestimate the value of storytelling, positive and negative stories, as the catalyst for change. Having a network of supportive, generous and truth-telling women is the greatest asset a woman can have in life and in business.”
The CMO of Employment Hero, Cat Prestipino, added that one pragmatic way for businesses to push for progress, is to offer flexible working conditions for everyone, in order to remove the stigma of childrearing from the workplace. “The nature of work has changed in light of technology, the growing understanding that people are productive at different times of the day and as the rise of work-life flow, rather than work/life balance, gains traction. By removing the stigma around flexible working conditions by offering them to whole companies (when practically possible), we remove the stigma of childrearing for both men and women, parents and non-parents. The upside will be more productive and more balanced employees all round.”
Gallaher went on to say that strategies that make a difference-even if they are not perfect-are where business leaders should be putting their efforts. “I have seen enormous change result from the #panelpledge-refusing to speak at an event if the panel or line-up of speakers is heavily biased against women. Calling out event organizers on this bias delivers very effective results, particularly when you can put forward the names of women speakers that you know can make a meaningful contribution to the dialogue. I think the greatest wins can be achieved at home, particularly with primary school aged children and helping them to recognize the bias against girls and women within their world of school, media and amongst friends and family.”
The more women in power, the more women they will bring on board
Perhaps not surprisingly, women employers are much more likely to hire other women compared to male employers. In a gender study by Harvard Business School professors, when a woman was making the hiring decision, women were hired 50% of the time, yet when a male employer was making the decision, women were hired less.
Essentially, when you acknowledge there is a bias, you can look for ways to overcome it. While a woman shouldn’t be put into a position of power for the sake of her sex, there are many capable women who get passed by because of entrenched gender bias. A possible solution here includes anonymous candidate selection, where potential job candidates are reviewed without their gender being known and without hirers being aware of any information that indicates candidates are mothers with children.
Co-founder and Head of Growth at Cooperate, Amy Walker, said that big business must also make use of their Objectives and Key Results (OKRs). “One of the biggest challenges for organisations is promotion, and too often men and women will differ in how they put themselves forward in these kinds of scenarios. If an organisation has solid OKRs in place based on the jobs that role needs to achieve, then they have an assessment tool that they can rely on internally to shortlist promotion prospects based on real-time performance and ability, rather than the more traditional ‘show pony’ approach. I think it’s fundamental for all minority workplace groups to be given the confidence they need to succeed in their chosen career, whether that’s women, men or specific ethnic groups.”
Justine Greening, the UK Secretary of State for International Development, once famously said, “No country can truly develop if half its population is left behind”, so shouldn’t the same be asked of companies today?
A report by the Bank of America estimates the Global GDP would jump by 31 percent, or $28 trillion, by 2025 if women’s economic equality was advanced. Perhaps each of us needs to ask ourselves, if we want to help bridge the gender gap, where are the opportunities for women empowerment and growth within our companies today?
By Kate Harrison