Posts Tagged ‘bottom line’
Take 5: Why Men Should Care
By Ilene Lang and Jeanine Prime, PhD
Seventy-four percent of the men we interviewed in our series, Engaging Men in Gender Initiatives, identified fear and apathy as barriers to supporting gender equality. In today’s Take 5, we look at reasons why men should care. Men have a lot to gain, and nothing to fear from equality. Here’s why:
#1: Good business sense. Gender bias inhibits problem solving and hinders innovation. And study after study has linked increased female leadership to stronger, on average, financial results.
#2: Boost your net worth. Women in the US lose about $380,000 due to the gender pay gap over the course of their lives. If your partner is a woman, closing this gap makes good financial sense for you and your family.
#3: Increased personal freedom. Imagine a world where you do not need to hide family responsibilities from co-workers and you have the freedom to admit you don’t know something without calling your masculinity into question.
#4: Live longer. Sometimes being a man—especially if it means never asking for help—can compromise your health. Equality has shown to improve health and quality of life.
#5: Your children. Equality now ensures that the next generation will have all the opportunities to succeed on an equal playing field for all.
Act Now
Change has flatlined—women are no further toward achieving top ranks in business than they were last year, or even six years ago. Yet equality can’t wait.
Our latest census of women atop the Fortune 500 shows continued stagnation. Men hold a staggering 83.9% of corporate board seats, 85.1% of Executive Officer positions, and 92.5% of top earner positions. While I applaud the hundreds of companies that have achieved real results, others haven’t gotten the message that valuing talented women is not a “nice-to-do,” but a “smart-to-do.” We found that 56 companies in the Fortune 500 had zero women directors and that 136 Fortune 500 companies had zero women executive officers.
These new numbers are deeply disappointing. Some companies are still sitting on their hands. It’s time to commit to action, and the best time to jumpstart this change is now.
Here’s why.
Today’s tough economic times present an opportunity. Our latest report in our Bottom Line series tracked profits at leading companies through 2008—one year into the global recession. We found that companies with three or more women board directors in four of five years outperformed companies with zero women on their boards by on average 84% return on sales, 60% return on invested capital and 46% return on equity. Given the clear correlation, it’s no wonder that Goldman Sachs recently found that closing gender gaps would yield a 9% bump to U.S. GDP!
And it’s not just about the money. Companies with more women board directors are linked to more women corporate officers five years later, and correlated with increased corporate philanthropy. In short, it pays to have women as a key part of the leadership team.
So let’s get to work and root out sexist stereotypes that impact talent management systems. Set targets with accountability, especially around proven solutions like sponsorship. And dump the myths about women’s capabilities and ambitions—our research shows that they are wrong.
When US corporations finally take their place as leaders on gender parity and advancing women in business, the benefits will spread across the globe for women, men, families, employers, communities, and societies. Defy assumptions and lead with real action.
Enough lip service. It’s what companies do that really counts.
Take 5: Bottom Line More than Money
Study after study has shown how gender diversity on top correlates to greater company profits, but this isn’t the only argument for why organizations should advance women to senior ranks. It pays to diversify for an array of other reasons too. Here are my Top 5:
#1: More diversity, more innovation.
Using a sample of Fortune 500 firms, researchers found a positive relationship between board gender diversity and innovation. They also observed a positive correlation between board racial diversity and both firm reputation and innovation.
#2: More women, fewer problems.
Analyzing 201 Norwegian firms, Sabina Nielsen and Catalyzing guest-blogger Morten Huse found that the ratio of women board directors was positively correlated with a decreased level of conflict.
#3: More women, stronger corporate ethics.
Every year, Ethisphere recognizes companies that demonstrate “real and sustained ethical leadership within their industries.” A study of the companies that make the coveted list found that they had an important factor in common: boards of directors with a high percentage of women.
#4: More women, more effective problem-solving.
A study by researchers from MIT, Carnegie Mellon University and Union College found that the number of women in a group of people significantly predicted the ability of the group overall to effectively solve problems.
#5: More women on top, more women in pipeline.
Studies by the RAND Corporation and Catalyst, among others, show a clear and positive correlation between the percentage of women board directors in a company’s past and the percentage of women top executives in its future. This suggests that one way to cultivate a healthy pipeline of women is to ensure that gender diversity starts on the top. The more women there—the more women everywhere!
Diversify or Die
Why does the phrase “diversify or die” get thrown around a lot when it comes to diversifying output, but not talent?
From real estate, to retail, to the newspaper industry, and even wedding planning, the phrase refers to the idea that it’s better to not have all your eggs in one basket.
This makes sense when we talk about products and services, but what about employees?
Diversification of talent fuels innovation and can drive profit, yet companies are slower to accept the need to diversify their staff than they are the need to diversify the items they sell.
They shouldn’t be. Diversity of product and talent should not be overlooked—both can be vital to business success.
Holiday Wishes
To mark the end of 2010—and my final Catalyzing post until January 2011—I asked my colleagues at Catalyst what they wish for in the days ahead for women and work. Here are Catalyst’s top ten wishes for 2011:
We wish for…
10. Inclusive, agile work cultures that reward results rather than face-time.
9. Companies around the world to “get it” that more women in senior positions can improve financial performance.
8. Men to champion and sponsor the many talented women they work alongside, question the tyranny of macho norms, take more responsibility for child-rearing and the division of labor at home, and become truly equal partners to women.
7. An acknowledgment that women are the key to solving the world’s problems.
6. Managers to accept and celebrate the career commitment of mothers returning from maternity leave.
5. Headline writers to actually link headlines to story content—instead of writing unrelated, misleading, or “sexy” headlines that do not reflect the more thoughtful points in the article.
4. An end to the false notion that women don’t help each other advance in the workplace.
3. The realization that diversity is not a zero sum game—women, men, families, business, and the economy have a lot to gain from inclusive workplaces.
2. Equal pay for equivalent work—eliminate the gender pay gap once and for all!
1. More optimism from both women and men who doubt that all this change is possible.
What do you want to see in 2011 for women and business? Let me know in the comments below!
C This
The gender gap receives attention as a serious business issue as more corporate leaders adopt programs and policies to remove barriers to advancement of women. Women are being recognized as a source of talent and future leadership, and progressive business leaders are working toward a truly level playing field. Some recent stories point to research by Catalyst and others to support these actions.
Women in Power Is a Leadership Issue
In a opinion piece in The Globe and Mail’s Time to Lead: Women in Power series, North American Vice President Deborah Gillis uses facts and research to counter the misconceptions that women have made it and that promoting women disadvantages their male colleagues. The fact is that women continue to be underrepresented at senior levels of business and in Parliament. And corporations with women at senior levels are growing their bottom line—and opportunities for all their employees.
READ: “More Women in the Workplace is Good for Business”, by Deborah Gillis, The Globe and Mail, 10/13/10
Women on Boards Correlate to Stronger Financial Performance
Corporate recruiter Janice Ellig, CEO of Chadick Ellig, cites research by McKinsey & Company and Catalyst to demonstrate effect of senior women on financial performance. “It’s not just in the boardroom, it’s at the C-Suite too. Those are the people making the decisions.”
Gender Diversity: Not Just a Woman’s Issue
Gender equality is still an issue at work, but it is not a women’s issue. Gender initiatives have traditionally focused on improving women’s participation in the workplace, but recently (in sociological terms, anyway) there has been a shift towards making “gender-“’ a gender-neutral problem.
Powerful Women Make Mistakes—and Make the Most of Them
Moira Forbes blogs about the similarities between an effervescent seven-year- old’s “awesome” pink cast and the lessons some powerful women have learned from apparent setbacks.
READ: “What Do Highly Successful Women and 7-Year-Olds Have in Common? by Moira Forbes, Forbes, 10/12/10
The Fear Factor
What are men so afraid of?
Seventy-four percent of the men we interviewed in our recent series, Engaging Men in Gender Initiatives, identified fear as a barrier to supporting gender equality.
Some feared equality could only come at the expense of men—the zero-sum myth I wrote about previously. Others feared that they would make mistakes—such as an inappropriate comment—in the presence of women and open themselves up to criticism. Still others feared they would be made fun of by other men—be called “wimps” or “whipped.”
Perhaps the only thing men should really fear is better health, higher profit and more personal freedom. Not too scary after all, huh?
We know that companies with more women in senior positions and in the boardroom, on average, outperform those with fewer. And when the burden is off men to act macho or be the sole provider, everyone wins. They get more time with their kids and closer relationships with their partner or spouse, not to mention the freedom to define themselves according to their own values rather than traditional gender roles. And when men lose the macho “go it alone” attitude and share more with the people in their lives, they experience less stress and better mental and physical health.
So listen up, guys. Your job, health and freedom are at stake.
Pay Gap Persists
Equal Pay Day has come and gone, but not the pay gap. Nor the work to get it closed.
Last week, a New York City Council hearing was held on closing the gender wage gap. It was organized by the New York Women’s Agenda (NYWA) and the Equal Pay Coalition of New York City. Both groups are fighting hard to end pay discrimination against New York women and minorities. They advocate for wide-ranging pay equity policies modeled on those put into place in 2009 by New Mexico Governor Bill Richardson—efforts I support.
The hearing featured an array of leading researchers, legal experts, and community leaders. Among those on hand was Beverly Neufeld, Vice President of NYWA and Director of Equal Pay Coalition NYC. She made a salient point about the deep impact women have on our economy through investment and spending.
“The hand that rocks the cradle rocks the economy as well,” she said.
Her comments mirrored something I read recently while browsing through books from our office collection. “Men and women in all walks of life must reassess their attitudes towards women as workers, and recognize the economic waste caused and injustices suffered to this point in time,” wrote J.E. Buckley in the book, Equal Pay for Women: Progress and Problems in Seven Countries.
Those words date back to 1975 when the U.S. wage gap was 59%. Today it’s 77%. More than 30 years later, we still have a long way to go—and a lot more to tell others—about how much the pay inequity hurts women, families and our economy. Too much is at stake—it’s time to get to work!
C This
This week’s roundup includes a video promoting the Toronto-based 2010 G(irls)20 Summit, plus articles about the upcoming Equal Pay Day, Justice John Paul Stevens’ exit from the Supreme Court, boardrooms Down Under, and the unwritten rules that still hold women back. Oh, and a word to the wise: beware of the glass floor…
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Putting the ‘G’ in G20
This video vividly captures the impact every girl can have on their family, community, and the world. Inspired by the clip? Then apply by May 7th to take part in the 2010 G(irls)20 Summit. From June 16th – 18th, 2010, a girl from each G20 country will meet in Toronto to craft recommendations for G20 leaders on issues that impact girls and women. Let your voice be heard— you can represent the world’s 3.3 billion girls and women.
Watch: “The Girl Effect,” GirlEffect.org/GirlsandWomen.com
Mind the Gap
Equal Pay Day is just around the corner. April 20, 2010 symbolizes just how far into 2010 women must work to earn what men earned last year. On average, American women earn only 77 cents for every dollar earned by a man—and the gap has barely budged since 2001.
Read: “Not All Differences in Earnings Are Created Equal,” by Carl Bialik, The Wall Street Journal, April 10, 2010
Supreme Parity
Columnist Charles M. Blow calls on Obama to replace Justice John Paul Stevens with a female justice. “The question isn’t why more women,” he writes, “but rather why not?”
Read: “O’Connor on the Court,” by Charles M. Blow, The New York Times, April 9, 2010
Dropping Down Under
Companies with a higher percentage of women on their boards do better, on average, than those with fewer. So why is the number of women in ASX200 boardrooms dropping?
Read: “The Fairest Board of All,” by Suzanne Daniel, WA Today, April 9, 2010
The Glass Floor
Channeling the message of our 2010 Awards Dinner Video, Larke Riemer, head of women’s markets at Westpac, said: “You’ve not only got a glass ceiling, you’ve got a glass floor. Who actually falls through the glass floor because they don’t get the support and the opportunities, so they leave?”
Read: “Time for Women to Tackle the ‘Hour-Glass’ Ceiling,” by Anneli Knight, The Sydney Morning Herald, April 8, 2010
Exposing Unwritten Rules
Catalyst research has found that unwritten rules play a major role in career advancement. Here are some tips on navigating these invisible, yet powerful forces.
Read: “6 Steps to Take On the Unwritten Rules Keeping Women out of Leadership Roles,” by Lynn Harris, The Glass Hammer, April 9, 2010
Women on Board?
Canadian and American women dominate the ice— but not the boardroom.
Our new Canadian Census reveals that women make up 47% of the labor force in Canada, but only 14% of board directors in FP500 companies. In the United States, the numbers are also low. Women comprise 47% of the U.S. labor force, but occupy just 15% of the board seats. What’s worse, these numbers have remained virtually unchanged the last few years.
You may think board directors are so high in the org-chart stratosphere that they couldn’t possibly affect you or your job path. But they do. That’s why it’s important to look for diversity when deciding where to work.
The boardroom sets the tone for the organization. The more women on a corporate board, the higher the percentage— five years later— of women in senior positions, especially senior line positions.
Companies with more women board directors, on average, financially outperform those with the fewest. In fact, the more women on board, the better the performance. And companies with three or more women on their boards, on average, perform even better! Chances are that these more successful companies afford women greater opportunity for advancement and development.
So when you are looking for a job, first check that annual report. Skip the pretty pictures, and head for the board listing. If it doesn’t include at least one woman— and preferably three or more—your odds of developing a satisfying career and rising to leadership have just taken a serious hit.
Choose an organization that invests in women. Vote with your feet.
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