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Gender-balance at the top of organisations

Ireland has come a long way since the days of the marriage bar and in the last decade with the support of robust equality legislation, greater awareness and economic development, the employment rate for women has grown significantly to 56.1%. While much progress has been made in putting men and women on an equal footing in the workplace, today in Ireland women continue to be under-represented in senior positions in corporate life, despite the fact that they represent half the workforce and more than half of new university graduates. This means that despite the growing number of qualified women in the workforce, we are failing to tap into the talent of half of the labour pool. This underutilises female talent and restricts the candidate pool we select from, at a time when organisations need to exploit every opportunity for competitive advantage. At the glacial pace we are progressing, female executive representation in Europe is unlikely to reach 20% until 2035.

This imbalance between men and women is at its widest at the very top where only 6% of companies in Ireland have a female on their board. At a time when organisations are being challenged by the dynamic global economic environment to find an effective method to achieve economic growth and stability, we cannot afford to waste any of the resources at our disposal in our aim to remain competitive and to harness market share.

Why does gender balance matter?
It is increasingly accepted that closing the gender gap at the top of organisations is a win for everyone. Studies show strong links between gender balance and financial performance, innovation, competitiveness and corporate governance.
    · Superior financial performance
Research has found that greater gender balance and the presence of women at the top of organisations leads to the out-performance of companies without women at the top. Studies outline gains in profits, return on equity, sales and investment and stock price growth. The World Economic Forum has correlated closing the global gender gap with increased competitiveness and higher GDP per capita.
    · Good governance
The events leading up to the recession show us how homogeneity at the top of organisations can lead to narrow thinking and a lack of proper challenge to decisions made. An organisation that embraces the widest pool of talent, male and female ensures a diversity of experience and perspective in the boardroom that broadens discussion. Diverse views promote debate and challenge group think. When complex problems need to be solved a diverse group of competent performers almost always outperform a homogenous group, even a homogenous group of star performers. Such diversity is more likely to yield greater consideration of alternatives, risks, and contingency plans and ultimately higher quality decisions.
    · Winning the talent war
The rise of talent is a key business issue and all organisations want the best talent. Successful companies are characterised by high creativity and skills and our focus on a knowledge economy is totally dependent on the combined skills of our employees. Today a company’s competitive advantage comes down to its people, and those organisations that harness the innovation and creativity of key talent will be the ones who outperform their global competitors and lead the economic recovery. We cannot afford not to use 100% of what is out there and people management is deemed to be the most substantial challenge facing companies over the next 5-10 years. Internationally birth rates are declining and a shrinking population means a shrinking global pool of skilled labour. Shrinking talent pools mean less talent and successful organisations will be positioning themselves to make sure that the full range of talented people find it an attractive organisation to work for. McKinsey have predicted that employers in advanced economies will face a shortfall of 16-18 million educated workers by 2020.
    · Customer focus
Research says that the more a company reflects its markets demographically the better positioned it is to reach and respond to the market needs. To understand the link between diverse boards and a diverse customer base, there needs to be an understanding of where purchasing power lies. Women are responsible for 80% of consumer purchasing decisions in the developed world. Despite the rise of women as consumers, many companies have failed to understand what this consumer group want with the majority of women reporting dissatisfaction with marketers.
    · Brand and reputation
Institutional investors are increasingly interested in diverse organisations. Although many investors focus solely on financial performance and earnings, increasingly attention is being given beyond the balance sheet to factors such as ethics and a commitment to diversity. Similarly greater diversity at board level has been found to promote a positive corporate image and greater credibility. The complementary skills and styles of men and women impact positively on business, fostering creativity and equipping organisations with better tools to address the needs of a multicultural, diverse, complex and unpredictable global economy.

Conclusion
Today more and more employers are active in promoting the advancement of their male and female employee’s careers. Many have engaged in a range of supportive measures aimed at increasing the gender balance such as, flexible working arrangements, mentoring and sponsorship, and leadership development programmes, but fundamentally the representation of men and women in key decision-making and leadership roles has not changed to any great degree.

Gender balance at the top means success for both women and men. When the talents of women and men are merged in a culture that puts skills, professionalism and results first, the outcome is not necessarily a redistribution of power and resources but a win-win situation leading to a greater outcome for all stakeholders.

Yet the achieving of gender balance requires new thinking and innovative approaches and ways to address the varied obstacles causing problems. What is needed is a business response to what is in essence a business problem. This topic is gaining significant attention in a range of circles nationally and internationally and attached are some of the key pieces of research and thinking in this area for your review.
Monday, 15 June 2015