Is This The Way to Equal Representation in Business?

Lack of sufficient female representation in boardrooms and executive positions is hardly breaking news. And it’s something we should all be worried about.

It’s widely accepted that equal representation in the workplace just doesn’t exist. The issue at this point isn’t so much publicising the concern; indeed, a great many people recognise the issue. Yet, by and large, they accept it. That is a serious problem.

Of course, there are many good people doing what they can to pursue equal representation, and in many areas we are making (slow) progress. FTSE 100 companies in the UK have a voluntary quota of 25% female representation at board level, and a government report suggests that companies achieve a 33% level of representation by 2020 (but warns against imposed quotas).

This is encouraging to some extent, but 33% clearly does not represent equality. I’m no mathematician, but surely equal representation would be 50/50—or as close as feasibly possible given the natural turnover of staff, execs and board members. Gradual progress is obviously the driving idea behind 25% and then 33% representation, but if we don’t aim for complete equality, how will we ever achieve it? And if we only aim to get there via a series of endless incremental checkpoints, how long will it take?

It’s 2016 and we’re a long way behind the times already, so why not shoot for gender parity now, with the help of big business? More can and must be done, and the biggest companies can help to accelerate our cause.

ladies-and-gentlemen-of-the-board-1

Recent research, illustrated in this infographic, shows the prevalence of under-representation at executive and board level for the top 10 companies in the Fortune 500. Some have achieved 25% representation, but the visualisation makes it clear just how far from equality the situation remains. It also shows that several of these companies fall well below what even the (somewhat token) current guidelines suggest.

Multinational retail corporation Walmart, for example, comes out better than other companies in this graphic, with executive representation at 28% and board representation at 27%. Still, the significant majority of men in both areas reinforces the ongoing gender inequality. Faring worse still, world-leading innovator Apple has only one female executive out of eleven (9% representation), and two women on a board of eight (25% representation). And so the trend continues down the list, with some companies achieving slightly higher or lower proportional equality than others.

The graphic clearly shows how far behind even ostensibly progressive companies like Apple are in terms of gender parity. Now more than ever, it is these household brands and respected business names that need, as much as any company, to actually be progressive in their recruitment – to show that success and equality can and do go hand in hand. Of course all businesses want security, growth and profit, and big companies like those featured in the graphic are in perhaps the strongest position to show that these goals are just as achievable with equal representation.

However, even if these sorts of global market-leaders do continue to meet recommended criteria and edge their way towards equality, that’s only half the battle. Closer to home, for many of us, will we necessarily see any trickle-down effect of their influence on smaller employers? While opinion remains divided on this—frustratingly, most discussion in this area retains something of a hypothetical tone at present—there are several good reasons to assume so. And, given we’re talking about the business world, it’ll come as no surprise to hear that profitability is perhaps key among them.

Many published studies indicate that a more balanced and representative workplace, at every level from ground staff to the boardroom, helps to boost customer relations, employee motivation, business innovation, and staff retention. However, as well as working wonders on back room morale and stability, equality has also been shown to be both directly marketable and profitable.

US research conducted by the federal Glass Ceiling Commission has concluded that equality does indeed have a positive impact on financial bottom lines. Its 70-page study into the economic imperative of managing diversity concluded that, “Organizations which excel at leveraging diversity (including the hiring and advancement of women and nonwhite men into senior management jobs, and providing a climate conducive to contributions from people of diverse backgrounds) will experience better financial performance in the long run than organizations which are not effective in managing diversity.”

Key evidence for this finding was drawn from a study by Covenant Investment Management, which rated the stock market performance of 100 companies rating among the lowest for employment equality against the 100 that rated most highly. The average annual return among the lowest-ranking 100 was 7.9 per cent, versus an average 18.3 per cent for the highest-ranking 100. In simplified terms, the study found companies that made stronger commitments to tackling glass ceiling-related goals tended to perform, as a group, over twice as well on the stock market.

Part of the reason for this disparity in performance may well be that equality and diversity are, in and of themselves, highly marketable. As noted by the Society for Human Resource Management, businesses are missing out as soon as they become less representative than their customer bases. That has now happened, and then some: US statistics show that women purchase well over 50% of all products (closer to 80 per cent in many markets), and are now the primary investors in more than half of American households. And yet, around the world, companies are lagging sadly behind in keeping up with this ongoing societal shift.

Still, there are several reasons to be optimistic. As of 2015, new rules around shared parental leave came into effect in the UK, allowing parenting couples who met certain eligibility criteria to share leave (to some extent) following the birth or adoption of a child. The new rules weren’t universally lauded—he changes weren’t exactly seismic, the TUC argued that far too many parenting couples didn’t qualify, and employers’ groups criticised the greater complexity of the arrangement for businesses—but, broadly speaking, it was a seen as a small step in the right direction. For far too long, issues around maternity leave and longer-term childcare concerns have been indicated as possible causes for discriminatory hiring policies, particularly for women in their 20s. (It’s worth remembering that, as rightly pointed out by Frances O’Grady, the first female general secretary of the TUC, “it is illegal to not give someone a job on the grounds that they may have children in the future.”)

A recent report spearheaded by UK Citizens Advice and the Equality and Diversity Forum, entitled Solutions for Equality and Growth, put forward a number of useful recommendations for small and medium enterprises (SMEs) with regards to operational gender equality. In all, it said, women make up 47% of the workforce in small businesses and 50% of the workforce in medium sized businesses. And, while its main findings for workers indicated some depressingly familiar trends (one in five mothers reported a negative attitude towards pregnancy and flexible working from their employer, for example) it also found that 84% of businesses felt it was in the interests of the company to support pregnant women.

The report summary suggested several measures to help SMEs continue working towards full equality, including a raft of first-year support measures for new businesses explicitly targeting the perception of ‘employment risk’ related to women. For more established companies, ongoing support proposals included “the development of tools for SME mentors such as business advisers and mentors, banks and accountants, on key equality and growth issues.” It was also noted that “the role of independent advice agencies in cascading good equality and diversity practice” could be highly significant, and that “the processes for accessing workplace training [must be] simplified so that training is more available and accessible” with regards to equality of hiring and retention practices.

Equality has to be central in recruitment policy, and of course it will take a little effort to establish this – clearly true equality in the workplace is something that must be institutionalised to become part of company culture, and cannot be achieved simply through rigid adherence to a minimum quota. But with the number of equally capable, highly educated women and men in the marketplace today, fair representation in recruitment is clearly well within reach, while still allowing companies to hire and promote the best people for the job.

It’s time to stop living with the problem of under-representation and start doing something progressive about it—and the solution, it seems, could well lie in convincing businesses of all sizes that they stand to gain directly from a more representative hiring policy. Studies are increasingly showing that this as true in terms of bottom line profits as it is in terms of organisational strength, customer outreach and operational efficacy.

Ultimately, it’s about turning the outdated notion of company image around to reflect modern consumer society. If we can keep demonstrating to companies that equality in the workplace is increasingly seen by us—the buying public—as an indication of how well they are performing in the marketplace, then perhaps we can really start converting this anachronistic inertia into some real momentum.

headshotAbout the author: Morgan Franklin is a freelance writer and designer with a keen interest in business ethics, feminism and the environment. He works for a wide range of publications and you can find Morgan on Twitter at @MorganpFrank.

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Categories: Money

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1 reply

  1. Reblogged this on The SuperWomen Initiative and commented:
    We think you should give this one a read! Very smart stuff! #wemindthegap #genderequality #femalerights

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