Steadily & globally we are witnessing the promotion of gender diversity across all levels of business and enterprise. Taking cues from the regulation adopted by advanced nations e.g. Norway, Sweden – it is increasingly clear that a sustainable and innovative economy will need the participation of women on the leadership platform. Innovation happens when the decision environment encourages and draws upon diverse opinions and ideas from participants.
The state of businesses is such that progress is slow and regulators have been upping their game in inclusion of woman on company boards to provide a holistic governance model for listed companies.
A recent survey by Ernst & Young on gender diversity in the corporate sector threw up interesting facts and suggestions. It was revealed that business leaders acknowledge the need for diversity at senior management and Board levels, but have been slow to act on addressing the gender gap in a way that could get effective results. According to this study, there are five disconnects which are holding businesses back from achieving gender diversity on their boards.
1. Start here & now
Majority of business leaders assume that gender diversity has been achieved despite little progress in their own organizations. The World Economic Forum, Global Gender Gap Report of 2015 noted that gender parity is likely to take a staggering 117 years to materialise. Only a handful of the progressive boards mentioned that by 2020 their environment will see an increased participation from women across boards and executive management roles.
How can meaningful gender parity be achieved?
For women, it would help for them to network and align with mentors on their career path. There are enough examples of pioneers who have broken the glass ceiling and it helps to learn from the experiences of women leaders who share generously on their journey for e.g. Sheryl Sandberg and Indra Nooyi.
“In the future, there will be no female leaders. There will just be leaders.” - Sheryl Sandberg, Facebook COO.
Businesses will need to evaluate the gender mix across organisational cadres and set realistic goals. This can be further supported with a system of formal Coaching, sponsorships and mentoring programs for female executives showing promise. Stating out a policy that clearly espouses the goal and the action construct will go a long way in reaching the desired outcome.
2. Track the data
Organizations that measure gender parity, primarily count how many females have reached senior leadership positions. When they measure progression, it is up to 50% in middle management and declines discernibly to near zero at senior management. Companies lack metrics to follow women as they move in their career. Almost 70% of them have no intentions to measure impact of the gender-diverse board on financial performance.
Research conducted by Catalyst group on Fortune 500 companies showed that participation of women in leadership and return on equity have a distinct correlation. While only 32% of women applicants went on to senior leadership positions there is also a 25% gender pay disparity, that adds to the discouraging factor.
To tackle this situation, organizations need to set concrete targets to achieve gender diversity, measure the progress using clear metrics. The data should be used to identify the obstacles and enablers to female career advancements and improve efforts to achieve diversity goals throughout the organization.
3. Leadership pipeline
Companies aren’t creating a leadership pipeline for future female leads. There is no formalized process of developing women employee.
The study revealed that 72% leaders say that they attract as well as retain women to their organization. But only 56% say that they are effective at identifying, retaining and promoting female leaders. Only 18% have structured and formal programs to identify and develop leadership qualities in women. Companies are not sufficiently aware - why their best female talent don’t make it to the management levels due to a lax monitoring system.
Companies need to invest in the frontline ranks to allow women become successful future senior leaders. A Training need analysis can be conducted to identify the learning areas and introduce management programs to nurture their professional skills. This obviously cannot happen without a serious engagement from women on the career path to developing the leadership pipeline.
Coaching women managers to enhance their leadership behaviours can increase effectiveness a long way in the traditional male dominated management club.
4. Unique perspective
Male and female communities have different views on gender diversity gap and its solutions. Women and men see problems differently. Boardroom dynamics have thrown up unique perspectives in a diverse board, some of which are:
· The dialogue is enhanced as women tend to seek out others opinions to understand better
· This led to better decision making, while also appreciating a dissenting view,
· Which in turn led to effective management of risk and crisis handling,
· Overall the governance and guidance model for management was improved
· The boardroom meeting environment came through more efficiently
Business leaders should create an open dialogue environment between men and women. There should be an active participation and commitment of senior management in empowering, encouraging and mentoring women executives. An open environment will be crucial to also tide over the initial hurdles that could result from longish questioning as executives went about understanding different positions.
5. Drive progress
There has been some progress in achieving gender parity but nowhere near what’s good to have. E&Y found that 92% leaders believe a diversity of thoughts will be the key to overcoming challenges of this transformative environment. Consumer products, Retail, Banking industry leaders are most positive on increase in the number of women in leadership in next five years. Others are following through to include the women insights into decision making.
Capital markets, Investors and Regulators across majority of countries are demanding that quotas for women directors on company boards be met. Companies with a good diverse mix have reported progress on their work environment, values and good governance for all stakeholders, in addition to a better economic performance.
Our society has indeed registered progress on the diversity front and this is only set to increase further with the millennial generations. The next-gen workers are not hard wired with the notions that some jobs are gender specific only, as more females are racing ahead in the economic participation.
Society is changing and I see the way ahead as more inclusive, creative powered by a 50:50 model workforce of the future.