The biggest issue facing most major economies today is economic growth and job creation; yet it is with mixed results that governments and business are tapping into arguably the largest emerging market in the world and the greatest natural resource for knowledge, talent and investment: women. Given the challenges facing economies, there is a strong imperative to move quickly and harness this potential. This is why BIAC enthusiastically welcomes the OECD’s initiative on gender equality.
There is a long way to go with respect to improving women’s economic opportunity, and in particular at executive leadership levels. According to current data, only 14% of senior executive positions at the Fortune 500 are held by women, a number that has barely budged since 2005. A global study of the number of women on boards is even more dismal—only 9.4% globally, up marginally from 9.2% in 2009 according to GovernanceMetrics International. This is despite the fact that economic studies show that corporations with women on their boards and in leadership positions have a higher return on equity. In Europe, the return has been estimated at more than 10%.
Furthermore, a Deloitte study citing data from the Harvard Business Review forecast the income and global spending power of women at US$18 trillion and $28 trillion respectively by 2014. Women typically spend money differently from men, with different buying patterns and preferences.
Thus, companies should invest in understanding women as consumers and fully capitalising on their purchasing power. Getting more women in the workplace, including in senior decision-making roles, who understand the buying preferences of their cohorts makes business sense.
A 2010 global survey of executives found that 72% agree that there is a direct connection between gender diversity and business success, but only 28% say it is a top-10 priority for senior leadership. Institutional investors, however, increasingly identify gender as a key determinant in their investment decisions, banking on the gender dividend in the long term.
What can be done to improve opportunity for women, which will benefit business performance, the economy and society as a whole? Focused government policy and business engagement at all levels is needed to support women at work. Sound socio-economic policies must underpin and encourage action, and governments, along with business, must innovate, support community investment and remain committed to making the difference as it relates to women.
Gender equality may be on the agenda of the G20 government leaders, but it can be argued that this should be elevated to a higher priority, given the economic and community benefits of empowering women. The OECD, a key advisory body to the G20, is undertaking an extensive project on gender equality which is rightly focusing on the “Three Es: Employment, Education and Entrepreneurship”. These elements represent key pathways for women in the economy and society in both developed and developing countries alike. The OECD analysis will help identify and develop better indicators necessary to inform key policy decisions that surround these issues. There is a lot of anecdotal evidence supporting the need and benefits to empowering women, but clear data can be a significant motivator.
Business too has a role to play. Change requires measurable, management-led policies and practices that drive female leadership, across management roles and divisions, on boards, at the highest executive levels (the C-suite) and throughout the talent and supply chains. Many companies worldwide are making significant strides in addressing not so much the glass ceiling, although this does continue to present a hurdle for many, but the stubborn problem of the leaking pipe of female talent. Retention rates for women dramatically decrease with seniority and advancement.
Business implements countless formidable approaches and statistics suggest that these seem to be making a difference. For example, Mass Career Customization™ (MCC), the brainchild of two women at Deloitte. Developed and piloted in 2004 and rolled out across the US between 2007 and 2010, MCC enables employees to collaborate with their managers to design career paths responding to their specific needs and those of the business. Not solely designed for women, but recognising women as major beneficiaries, it has improved satisfaction of Deloitte’s professionals with work-life balance, has contributed to improved retention and is correlated with employee engagement.
Another case study of the gender dividend in action is the Deloitte Initiative for the Retention and Advancement of Women (WIN). Started in 1993 at Deloitte US, its results tell the story. In 1993, women comprised only 7% of partners, but in 2011 there were more than 1,000 women partners, principles and directors, representing 23% of management, one of the highest amongst its peers. It has also changed the culture to one of where both men and women can succeed, and positively impacted the Deloitte brand. The success factors of this initiative are strong leadership from the top—five CEOs have spearheaded the initiative since it started; the positioning of WIN as a business strategy; and innovation to allow WIN to evolve and grow. When businesses far and wide recognise gender diversity as a critical business enabler and a strategic imperative, we will see even more positive developments in the economic empowerment of women.
At the end of the day, there is no silver bullet. Progress is being made, but ongoing commitment, leadership and innovation are required for economies to benefit from the tremendous potential women represent. This is not just a question of trillions of dollars of untapped consumer demand, but the potential for better, more informed decision-making in our societies, an educated and diverse source of talent for private and public institutions, and role models who can be an inspiration to billions of women and men worldwide. Government, business and society must continue to integrate women’s experiences, perspectives and voices into the fabric of their organisations and systems. Only then will we truly benefit from the gender dividend.
©OECD Yearbook 2012