Way back in 2012 Credit Suisse published some research that looked like it had the potential to change how companies recruited forever. Research from the bank had found that large companies with at least one woman on their board had outperformed their peers by 26% over the previous six years. This research, combined with the launch of the Davies Report into the number of women on FTSE100 boards, and the rallying cry of Sheryl Sandberg’s Lean In set the scene for a revolution in business. And yet, here we are six years later still asking, where are the women?
Things have improved somewhat. In 2012 women made up 15% of FTSE100 boards, they now make up 28%. However, the number of women on executive boards has barely risen, from 6% to 9%. Companies with more than 250 employees are now required to report their gender pay gap, but the average gender pay gap across the UK has changed only marginally, hovering at around 9.7% for the entire period. And while statutory paternity leave has come into force, very few men seem inclined to take it up. What all this shows us is that if we really want gender equality in business, if we truly believe the Credit Suisse report from 2012 and the McKinsey reports which followed it, showing that board diversity can improve the bottom line anywhere from 6-12%, then we have to continue to take action.
Part of this solution is about being aware of the business case for diversity; a “nice to have” it falls off the to-do list when we become aware of the impact it makes on our organisation, making it easier to prioritise. The first reality is that diversity does bring better decision making. A study from the Kellogg Business School showed that diverse groups found more solutions to a given problem and saw more potential outcomes than a homogenous one. Similarly, a new study from MSCI has found that having three or more women at board level improves the productivity of the entire organisation.
The other reality is that organisation client bases are changing. The days of being able to send an all-male pitch team to a potential client and be facing an all-male team across the table are over. As companies become more diverse they want the companies they do business with to be diverse as well. If you can’t keep up with the times, you risk losing business. You also risk losing great talent. If we don’t focus on how we incentivise and retain female talent, then half of the brilliant people you hired at graduate level will slowly slip away – often to your competition.
Discussing the gender pay gap or women on boards can often make diversity at work feel like something that is a “should do” rather than a “must do,” but you treat it like that at your peril. Understanding the needs and desires of your female workforce is business critical, and anyone who fails to see that risks falling behind.
Harriet Minter is one of the keynote speakers at EMEA Perspectives. To hear her presentation, Is That What it’s Like to Be a Woman? Why We Still Haven’t Solved Gender Diversity in Business, and more, register here.