The Joe Biden government has made history when it comes to female representation in politics and government-appointed roles. The US now has its first female vice president, treasury secretary, and director of national intelligence. Some countries have made even faster progress. Last year, the city of Paris was fined €90,000 for having too many women in senior civil service roles.
Meanwhile, the corporate sector is also making headway, albeit slowly, in breaking away from homogenous boardrooms. Corporate behemoths like General Motors, Nasdaq, Northrop Grumman, and Best Buy are all under female leadership now.
Females heading Fortune 500 companies will stand at 41 at the end of the first quarter of 2021. That’s more than a three-fold rise from just a decade back. But it still translates to a meagerly 8.2% of the top 500 businesses. It seems even less impressive when you think about ethnic representation.
Historically, gender inclusivity has been a less spoken-about topic in the corporate agenda. So much so that regulators have had to intervene and force businesses to rethink their gender imbalances, particularly in the C suites and the boardrooms.
California, for example, has now made it mandatory for all public companies to have at least 1 female on the Boards of companies headquartered there. And in December last year, NASDAQ filed a proposal requesting authority to demand greater gender participation, transparency, and reporting from corporations.
Without a doubt, gender diversity and inclusiveness require much more prominence, particularly at senior levels. But it has to be for the right reasons.
Gender diversity is about much more than a headcount
To understand why gender diversity is important, businesses need to think beyond the gender quotas. A headcount mandate could breed resentment and a sense of unfair advantage. But diversity and inclusivity should not become a moral dilemma or a compliance obligation. It should be a priority for the sake of performance and growth.
A McKinsey study shows that companies with the highest gender diversity could outperform those with the least by as much as 48%. An S&P Global study has found similar evidence. It shows that firms with female CEOs and CFOs delivered a higher stock price performance compared to the market average. And according to studies, gender equality could add as much as $13 trillion to the world GDP by 2030.
Some are already taking note and moving towards massive action to increase female participation in their own organizations as well as others they do business with. For example, companies like Goldman Sachs and BlackRock are taking measures to make diversity and inclusivity a deciding factor when choosing who they work with.
No longer a quota
So, diversity should no longer be a quota that’s assigned based on moral obligations. It should be a smart business decision that takes account of real business impact.
And to do that, organizations must create an environment for women at work to thrive and for businesses to get the best out of a diverse workforce. Now, this may demand some changes around the workplace and in work practices. Companies, for instance, may need to hold virtual board meetings to accommodate a female executive tending to a sick child at home. But aren’t businesses doing that now anyway with the pandemic stay-at-home orders? And it seems to be working just fine for many of them. So, making it a permanent fixture for the sake of diversity should not be such a difficult decision.
The point is, change is a given for any business to survive and thrive, whether it’s due to increased gender diversity or a global health scare. So, it’s time to shed the gender lens and approach diversity and inclusivity with business growth in mind.
Beyond the workplace
During a discussion at the Women in the World Summit in Manhattan, Indra Nooyi, the former head of PepsiCo, famously spoke up about her daughter sleeping under the desk while she worked long hours at the office. Pursuing a career while looking after their families is an uphill battle for many women as they struggle with a disproportionate amount of responsibilities at home.
With female representation dwindling in the higher ranks, many see these struggles as particularly pronounced at senior levels. But in fact, it’s the journey to the top that demands more attention. For many women, the larger portion of their struggles is at junior or mid ranks. For instance, hiring child care services is often a financial hurdle for most females in lower ranks. And this could prevent them from taking up additional responsibilities in the workplace, in effect, stifling their career progress.
So, what’s keeping women from pursuing a career is not always a chauvinistic work culture. Sometimes, their own personal struggles at home could prevent them from making the same level of commitment as their male counterparts.
So, to improve gender diversity and inclusiveness at work, we may need to look beyond the workplace. Indeed, men have a bigger role to play in improving gender diversity — a broader role that extends support not just in the office but also at home.