The World Economic Forum predicted in 2014 that it would take until 2095 to achieve global gender parity. Then, one year later, it estimated that a slowdown in the already glacial pace of progress meant the gender gap wouldn't close entirely until 2133 (ie 118 years later!). That certainly is a wake-up call for all!
Having more women in leadership roles is not simply an issue of fairness. Recent research has found that having more women in leadership roles gives firms a competitive advantage. According to a report published by EY in association with the Peterson Institute for International Economics, ‘Is Gender Diversity Profitable?’, there is strong evidence to validate this claim. This survey covered 21,980 publicly traded companies across 91 countries. It demonstrates that the presence of more female leaders in top positions of corporate management correlates with increased profitability for these companies. The report further states that for profitable firms, a move from no female leaders to 30 percent representation is associated with a 15 percent increase to the net revenue margin.
It is not just about getting a single woman to the top; it is more about building a cohesive woman leadership ecosystem. As per the report, companies that have female leadership interacting across many levels — directors, CEOs and executives – will achieve the highest return. Empirical data comparisons across S&P 500 companies and leading global firms lean towards this hypothesis. The study also highlights that nearly one-third of companies globally have no women in either board or C-suite positions, 60 percent have no female board members, 50 percent have no female top executives, and less than 5 percent have a female CEO. The study underscores the importance of diversity in organisations in particular.
Recognising the value in diversity, many nations have made it mandatory to have women representation on the boards of companies. In India too, Section 149 of the Companies Act 2013, has made it mandatory to have at least one woman on the board of every prescribed class of companies. In furtherance to the same, the Securities and Exchange Board of India (Sebi) made it mandatory for all the listed companies to appoint at least one woman director on their board of directors by 31st March, 2015, in alignment with the requirement of the Companies Act, 2013, under corporate governance norms.
Organisations have adopted various targeted programmes to build inclusiveness. Extended maternity benefits is one such programme where new mothers have the option of additional leave days over the mandatory 90 days period. Flexibility at work through limited working hours popularly known as ‘work from home’ has supported individual career aspirations while seeking to meet their work-life integration needs and preferences. Child care facilities and allowances too take away significant emotional burden from the women workforce. Paternity leave is becoming a point of consideration among the millennial workforce when evaluating employers. When child care becomes a shared responsibility between couples, women have a great opportunity to excel.
Recognising the importance of diverse teams, organisations have created network groups and mentoring programmes where mentors guide and enable women employees to realise their potential and take up greater workplace responsibilities. Such groups help to build a support system through shared learning and experiences.
Organisations must inspire their diverse workforce to feel empowered to maximise their own potential. It is about creating an inclusive culture that embraces and leverages all the differences. In fact, both are more than “hot topics” – they are drivers of business performance. They, in fact, help organisations maintain a competitive advantage through better collaboration and the ability to innovate for market needs. For example, companies that are highly rated for diversity and inclusiveness have a 19 percent higher retention and are 45 percent more likely to improve their market share and 70 percent more likely to have success in new markets.
However, this requires a change in mindset and is a journey which will take time for every leader in every business, in every country to recognise. It will take time to truly enhance the full potential of women in the workforce. However, the speed of the journey can be enhanced by a “concerted and conscious” effort in adopting and accelerating diversity and inclusiveness in our day-to-day business activities as well as our workplace.
I believe that by pledging for parity, we can redefine opportunities for future generations of women. By making a conscious attempt at sponsoring diverse talent, being a role model and rewarding inclusive teaming and leadership, we can create a ripple effect that advances women in the workplace and helps build a better working world?
(Views expressed are personal)
By Aashish Kasad, Partner Tax & Regulatory Services and Diversity & Inclusiveness Leader, EY India
The thoughts and opinions shared here are of the author.
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