To deliver progress on gender equality and inclusion, create real leadership accountability.
The increased focus on ESG in the mainstream of business thinking challenges organizations to move faster than ever on diversity, equity and inclusion at work. Gender diversity and inclusion is one of the central strands of business’s social responsibilities, the S of ESG, and leaders have an obligation to keep it at the top of the agenda as they seek to unlock the power of purpose to deliver progress on the complex social problems facing the world. Achieving change demands that leaders create work environments where women win.
In recent years, many businesses have made real steps forward to improve women’s representation and build more inclusive workplaces. Women make up an increasing proportion of senior leaders in many major economies, including the US and in Europe. But progress is not universal – and its continuation will not happen automatically. Crises such as Covid-19 risk reversing recent advances. As the UN Secretary-General António Guterres warned in April 2020, “Limited gains in gender equality and women’s rights made over the decades are in danger of being rolled back due to the Covid-19 pandemic.”
Those words were prescient. As the pandemic has rolled on, disproportionate numbers of women have dropped out of the global workforce. McKinsey research has found that women felt under more pressure during the crisis and were immediately more likely to leave their jobs or downshift. Now, as organizations debate when and how to go back to the office, there is a risk of women being marginalized if companies short-sightedly sweep away the models of hybrid working that are proven to be so powerful for helping women to stay in the workforce.
Boosting female employment could increase GDP by over US$6 trillion
Yet the benefits of improving women’s role in the economy are enormous. Research by PwC suggests that boosting female employment rates in the leading group of OECD nations to match that of Sweden could boost GDP by over US$6 trillion. The impact of women remaining excluded and under-represented is colossal, too: gender gaps cost OECD economies an estimated 15% of GDP.
How, then, can organizations create the necessary internal momentum to improve the representation of women in their workforces; to create truly inclusive environments; and to impact on women in the communities where they operate? We identify six key areas.
1 Leadership is all
Leadership commitment is critical, from the top of the organization down. Defining clear ownership of the gender agenda is vital for achieving traction. Establish board oversight too.
2 Target the change you want to see
Effective strategies for diversity, equity and inclusion – and other areas of ESG – demand clarity about the current situation; about the task at hand; identification of key actions; and continual monitoring of results. Being clear about your targets and how you will measure success is essential to create accountability for change and ensure leaders deliver on their responsibilities.
3 Embed gender diversity in talent development
Ensure women are supported to access skills programmes that put them on career paths in areas that are driving the future of business, including those related to key technologies. Focus too on making sure women are included in talent programmes, and participate in leadership development, at an equal or higher rate than men, to ensure that the talent pipeline supports gender balance for the future.
4 Go beyond representation
Increasing women’s representation is essential – but it is not the only dimension leaders should focus on. They need to create truly inclusive cultures, where women feel valued and heard, and contribute fully to the organization’s success. Celebrate women in senior leadership positions to show younger generations of women and girls that anything is possible and inspire them to aim for the top.
5 Embed mechanisms to drive change
Drive leaders’ behaviours through compensation plans that incentivize progress on ESG outcomes, including gender, and other critical areas such as decarbonization. Look to link both long-term incentive plans and short-term annual incentives.
6 Impact on the community
Delivering on ESG is not just about what happens inside the organization. Large businesses in particular are powerful players in solving the problems our societies face. They need to bring their creativity, innovation and resources to bear, through their products and services, to meet the needs of the communities where they work. Doing well and doing good in the community go hand-in-hand.
In an ESG world, businesses need to rethink their strategies for leading through a wide range of complex challenges. Creating the workplaces where women win should be high on the agenda.
Sharmla Chetty is chief executive of Duke CE. Paul Norman is chief HR officer at MTN Group.