Despite the mountain of evidence from reputable organizations worldwide demonstrating the return on investment of promoting women to leadership positions, many companies remain in a time warp, continuing to pay lip service to equality and gender diversity.
A report, called the Bridging the Gender Gap in Venture Capital, done by Babson College based in Wellesley, MA, found that in venture capital circles, women lose out.
The report, released last month, found that only 2.7 percent of the 6,517 companies in the United States that received venture capital funding between 2011 and 2013 were headed by a woman. And those companies only received 3 percent or $1.5-billion of the total $50.8-billion invested during that timeframe.
How does one explain the fact that highly educated people who profess to understand the business case for women still don’t get it?
My recent encounters with several clients seeking to shift the gender imbalance within their team caused me to reflect on isolating the root causes of persistent gender inequality and highlight the consequences of inaction.
In one instance, a senior vice-president in the financial services sector told me that he shared the news with his team regarding the promotion of one of his managers just prior to her taking maternity leave. Several managers questioned the timing and had difficulty accepting that she had earned the promotion.
In another situation, a major retailer received feedback from both men and women in leadership positions expressing their concerns about their company’s “women in leadership” initiative. Several female leaders said they were uncomfortable being singled out, while several men felt it was unfair that they were excluded from the group.
In both examples, despite the best intentions of leaders, workplace tensions over gender issues have increased as the root causes aren’t fully understood, leaving these organizations exposed to potential negative consequences to their bottom line and corporate image. Unfortunately, there are many similar scenarios playing out daily in industries worldwide.
What lies behind such reactions? Socialized conditioning is one explanation. We all learn to play specific roles from an early age, and it is a fact that these roles and stereotypes are internalized, reinforced and perpetuated in subtle and not-so-subtle ways.
As adults, we may inadvertently find ourselves defaulting to the girl/boy conditioned responses in the most sophisticated business settings, without understanding that we are acting out roles learned in childhood.
The persistence of gender biases, whether structural or attitudinal, needs to be addressed for the following reasons:
- A new generation of talent demands equity and non-discrimination
Generations Y and the upcoming Z cohort closely scrutinize the character and leadership of a prospective employer. They are attracted to companies that not only take a stand on equality but also live and breathe it.
In a tight labour market, businesses can ill-afford to ignore the importance of their reputation to this new, highly savvy generation. Companies such as AutoNation, Lululemon, Starbucks, LinkedIn, and eBay successfully draw Gen Y talent to their executive board because appointing women gives them key strategic advantages, including representation at the highest level of their core customer base, the ability to hire sought-after thought leaders and innovators, as well as stimulating stronger financial performance.
Organizations that profoundly understand the mindset of the new workforce will be ideally positioned to attract, develop, retain and promote them.
- The female perspective enhances collective intelligence
Research first reported in Science Magazine regarding the contribution of women to the collective intelligence of a team garnered worldwide attention, particularly the studies highlighting the performance of women when tested on tasks relating to brainstorming, complex problem-solving and decision-making. The findings confirmed that a group’s collective intelligence was strengthened by the inclusion of women and their enhanced capacity for listening, collaborating and intuitiveness.
The CIA is one example of an organization that made a notable transformation of its culture by not only ensuring women had greater representation in senior positions but also explicitly recognizing that it was women on their team who discovered the location of Osama Bin Laden, allowing for him to be captured.
- Second generation biases hinder career opportunities
Subtle, pervasive barriers hindering opportunities for women’s career progression remain embedded in organizational structures, even though companies tout policies of equal opportunity.
In addition, characteristics typically associated with desired leadership traits remain largely masculine. These second-generation biases influence hiring practices, promotional opportunities and the limited appointment of women to senior positions.
Enlightened organizations are gaining the strategic advantage by overhauling the configuration of their leadership team and the structures that no longer serve their growth objectives.
- More women in leadership boost your bottom line
The financial benefits of greater gender equity are undeniable. Extensive global research conducted by Credit Suisse, Catalyst and McKinsey & Co. examining the link between women on boards and stronger financial performance of Fortune 500 companies has been cited in numerous publications. Examining the return on sales, return on invested capital, and return on equity, their research confirmed that companies with women on their boards of directors outperform those with the least number of women by significant margins in each category.
An organization can augment its fiscal position by making a concerted effort to significantly increase female representation at the executive level.
- Governments are mandating gender equity legislation
Ontario Securities Commission is moving forward with its “comply or explain” proposal asking companies to disclose the gender specifics of their board, as well as their plans and procedures to increase female representation in their executive and boards.
The OSC’s recommended rules for disclosure by TSX-listed companies, to be implemented by the end of this year, have been adopted by seven provinces and two territories, the regulator said this week.
While many governments and business leaders agree that change is needed based on the reasons above, not all are in favour of the move, arguing that companies should either regulate themselves or insisting the definition of equality be broader.
Canada would not be the first country to mandate gender equity for businesses. Norway took the lead in 2008. Iceland, Belgium, Italy, Spain and the Netherlands were next. Malaysia and Brazil have implemented quotas while Australia, Britain, and Sweden are advocating that firms voluntarily implement minimum female board appointments.
Ready or not, agree or disagree, there is no doubt the debate will continue – and your organization will ultimately determine its own destiny when it comes to gaining the strategic advantage of gender equity.
Source: The Globe & Mail
Title: Why you want more women in your boardroom