Include More Women in Key Positions, Pay Them Equally – The Solution Right In Front Of Our Noses
We hear ideas. We think, “I/we should really do that.” And then, we revert to the norm.
Over and over again.
In order to actually change, maybe somebody needs to “force” the change on us.
This is the problem underlying many other problems. I thought of this again when I read Can Women Save Davos? Quotas Aren’t Just Political Correctness by Jesse Ellison on The Daily Beast.
Here’s the problem. Women are not making enough headway. There are not enough women at/near the top. There is still great income disparity between men and women. And, all of the evidence points to this reality as a problem with many ripple effects. Or, to put it differently, if women were given much more access, more actual seats at the table, then the economy in the United States and throughout the world would get in better shape more quickly. In other words, fewer women in positions that matter results in serious negative consequences.
And this is what I think – most people are now convinced that this should change – but we simply, too easily, too readily, automatically, revert to the norm.
To the article: last year, only 17% of participants at the Davos World Economic Forum were women. This year, the organizers have mandated that each sponsor include at least one woman in their delegation (each delegation numbers 5).
In 2010, just 12 of the global Fortune 500 companies were run by women; one in 10 board members on Europe’s top listed companies were female; and in the U.S., women held just 16.8 percent of the 535 seats in Congress.
These figures are particularly disturbing given that gender parity is not just good for business, it’s good for everyone. In its annual survey on global gender equity, the World Economic Forum itself said closing the employment gender gap could increase U.S. GDP by as much as 9 percent. In the developing world, the Center for Work-Life Policy estimates that utilizing women could push per capita income up 14 percent by 2020, and 20 percent by 2030. “Study after study,” says Christina Tchen, White House director of public engagement, “shows that increasing education levels and prosperity of women and girls has been able to contribute to social stability and economic progress.”
The top-down approach may not be popular, but it works. Norway famously embraced quotas in 2002 and began requiring that 40 percent of all board members at state-owned and publicly listed companies be women. The measure sparked massive public debate, and success was by no means immediate, but now it’s considered such a success that in 2008, Spain introduced a similar recommendation, and both France and Britain are discussing following suit. Implementing these requirements, rather than letting them happen over time, makes for a difficult transition, even after the debates die down. But the trickle-down effect could be tremendous.
Companies that have both men and women in leadership positions have a higher return on their investments, and recent research from the London Business School suggests that productivity levels go up when men and women work in tandem—in part because gender parity counters the idea of groupthink, or the frequency of like-minded groups to defend ideas that may be ill-conceived. A McKinsey survey recently determined that more than 70 percent of companies that made efforts to empower female employees in emerging markets either experienced or expected to experience increased profits as a direct result of those efforts.
This reminds me of some of the findings cited in Womenomics by Katty Kay and Claire Shipman (I presented my synopsis of this book to a Women’s Business Group earlier this week):
A study in France found that companies with more women in management positions did better during 2008 – had higher profits – that those with fewer women. “Feminization of management seems to protect against financial crisis… In conditions of high uncertainty, financial markets value companies that take fewer risks and are more stable.” (Michel Ferrary, Professor of management at the CERAM Business School in France).
Women deliver profits, often in big numbers, and we are worth hanging on to… By every measure of profitability – equity, revenue, and assets – Pepperdine’s study found that companies with the best records for promoting women outperform the competition
Companies with women in top leadership positions have “stronger relationships with customers and shareholders and a more diverse and profitable business.” (University of California at Davis study).
Davos has decided to mandate the inclusion of women. This quota system may be objectionable to some, but the evidence seems to be clear – more women in positions of influence, with access to real power; more income equality; can lead to more success, better profits, a stronger economy.
And, by the way, it is the right thing to do.
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