Pitchfork Partners, which I’m part of, recently partnered with ‘Break The Ceiling Touch The Sky’ – a success and leadership summit for women in corporations. While the day-long event touched upon various issues – from how women are changing the face of business to making men the champions of gender equality – the best argument for gender inclusion came from Al Rajwani, MD and CEO of P&G India. “It’s not just the right thing to do, it also makes business sense,” he said.
In fact, the business case has been apparent for a while. Several studies show that corporations with more than two women board members deliver better returns on equity than those who don’t.
Companies with women in leadership positions consistently do better. Nasscom pointed to an ‘Economic Times’ study several years ago that Indian firms headed by women had a compounded annual growth rate of 35% compared with 21% registered by the Bombay Stock Exchange (BSE)-30. Their profits grew by 56% over five years compared to the BSE-30 firms’ 27%.
Despite the evidence, India lags behind the rest of the world when it comes to corporate leadership roles held by women.
According to a Grant Thornton survey last year, India ranked third lowest in the world in proportion (15%) of business leadership roles held by women. Japan at 8% and Germany at 14% were the only countries that fared worse.
The global average was 22%, unfortunately down from 24% in 2014. Almost a third of businesses, the survey said, had no senior women leaders.
Most businesses, it would seem, are apathetic to the sentiment expressed by Parag Pande, MD, HR, Accenture in India, Sri lanka and Bangladesh, at the summit: “You will be wiped off the map if you ignore the female talent pool.”
Here’s why the panelists said gender inclusion and equality should matter to companies.
- It makes business sense: Women account for 60% of college graduates but only 3% of leaders worldwide. As we’ve seen above, businesses that have strong female representation in their leadership do better – and corporate heads understand this. The PricewaterhouseCoopers (PwC) 18th Annual Global CEO Survey reported that 85% of CEOs whose companies have an inclusiveness strategy said it improved their bottomline. “You get what you measure,” said Rajwani at the summit. “Track how many women are joining your company, how many stay, and make interventions for inclusion.”
Many CEOs are now crafting diversity statements and making sure their companies and the world at large know of them. Among them is Intel’s Brian Krzanic who, at the 2015 International Consumer Electronics Show, unveiled the ‘Diversity in Technology’ initiative. Intel’s programme includes new hiring and retention goals and a $300 million budget to build a pipeline of female and underrepresented talent.
- Gender inclusiveness impacts talent management: According to PwC research, 86% of female and 74% of male millennials consider employers’ diversity, equality and inclusion policies when deciding whether to work for them. Equality is good for the economy too. In India, gender equality could result in a GDP boost of 27%. In fact, women make a massive difference but it often goes unacknowledged. As Suresh Narayanan, CMD, Nestle India, said: “Women should believe they start from a position of strength. Their contributions are enormous.”
Here’s what a corporation’s typical inclusivity evolution would look like.
As Rajwani said: “Gender diversity and inclusion is a journey. Get started.”