30 percent by 2057 – Can we get there quicker?

There is no doubt that the trend to have more women on company boards and their greater representation at the senior levels of companies and other organizations is on an upward trajectory. The problem is that the trend is moving at a slower pace than many would wish. And the reasons for this are infuriatingly varied. There is no one easily identifiable issue which is holding up progress and this makes it harder to try and accelerate that progress. But there are many areas where enthusiasm, enterprising initiatives and, in some cases, government action, are making a real contribution to change.

Much of this came to the fore at the recent workshop of the OECD, BIAC, the business and industry advisory committee to the OECD, and the American Chamber of Commerce in France. I’ve mentioned this event before in previous blogs, and it is its second session on which I reflect today.

Reflecting on 'the business case for women’s economic empowerment' workshop

The recent joint workshop on the business case for women’s economic empowerment which I chaired at the Organisation for Economic Co-operation and Development (OECD) in Paris was, I hope, another small step to integrating women’s experiences, perspectives, and voices into the fabric of our organizations, systems, and societies. Over 120 experts from around the world had gathered, including the U.S. Ambassador to the OECD and the OECD Deputy Secretary General, and representatives of business, government, and investor communities.

It was a joint meeting between the OECD; BIAC, the Business and Industry Advisory Committee to the OECD; and the American Chamber of Commerce in France and the aim of the day was to provide a business perspective and best practice experience to the OECD’s Gender Initiative. A report on the shared ideas will go forward to the 2012 OECD Ministerial and Forum to be held in May.

The levels of engagement in the discussion reflected just how important an issue this is for many, and for many reasons. What was being discussed didn’t seem to be mostly about the research and the data. It was much more grounded in common-sense and shared experience. Several people mentioned President Obama’s recent remarks on the subject and used them as their starting point. He had said that what we are talking about when we talk of women taking a much greater place in the economic structure is very simply that we want the same opportunities for our daughters as we want for our sons. Put like that the issue becomes very simple and almost unarguable.

Ladies first

Ladies first: An old adage, but one that was top of mind on 2 February 2012 at the Business and Industry Advisory Committee (BIAC), AmCham France, and OECD joint workshop on the economic empowerment of women. And so it should be. Women are a critical resource in facing the challenges of our global economy, both as an emerging market and as a significant pool of human talent.  Further, gender diversity creates the potential for better, more informed decision-making in our societies, an educated and diverse source of talent for private and public institutions, and role models who can be an inspiration to billions of women and men worldwide.

Harnessing the potential of women in the workforce

I have just spent a fascinating week at the World Economic Forum in Davos, Switzerland. The theme for 2012, The Great Transformation: Shaping New Models, covered several topics such as shifts of geopolitical and geo-economic power, multiculturalism, technological innovation, and job creation. For example, academics and business leaders put forth the idea of job creation that focuses on the hundreds of millions of people that will enter the job market in the next decade. Businesses that will gain a competitive advantage in the future will be those that focus on talent by fostering entrepreneurial risk-taking and achieving true gender equality.

Against this backdrop of gender equality discussions, one of the highlights of the week for me was the Gender Parity session on Friday. As the leader of the Japanese Financial Services Industry practice at Deloitte Japan and the first female represented on the Deloitte Japan Executive Board, I am passionate about shaping employment and leadership opportunities for women. I had the privilege of talking to leaders from around the world in this interactive workshop about their experiences, and how to improve opportunities and career paths for women leaders in the future.

The Gender Dividend: An urgent economic imperative

The biggest issue facing many of the world’s economies today is economic growth and job creation; yet it is with mixed results that governments and business are tapping into arguably the largest emerging market in the world and the greatest natural resource for knowledge, talent and investment: women. Statistics strongly demonstrate that there is in fact a gender dividend, but despite progress, there is a long way to go with respect to improving women’s economic opportunity and thereby harnessing the potential of the gender dividend.

What is needed is focused government policy and business engagement at all levels to support women at work. Sound socio-economic policies must underpin and encourage action, and governments, along with business, must innovate, support community investment, and remain committed to making the difference as it relates to women. Amongst business this means measurable, management-led policies and practices to drive female leadership across management roles and divisions, on boards, at the highest executive levels (the C-suite), and throughout the talent and supply chains. Many companies worldwide are making significant strides, but ongoing commitment is needed.

This is not just a question of the trillions of dollars of untapped consumer demand that women represent, but the potential for better, more informed decision-making in our societies, an educated and diverse source of talent for private and public institutions, and role models who can be an inspiration to billions of women and men worldwide. Government, business, and society must continue to integrate women’s experiences, perspectives and voices into the fabric of their organizations and systems. Only then will we truly benefit from the gender dividend.

For more on this issue, read the full article (PDF). Also read and download Deloitte Global Public Sector's report "The gender dividend: Making the business case for investing in women."

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Charles Heeter is with the DTTL Global Public Policy Group and a principal in the U.S. member firm. In his role, he engages in Deloitte global public policy initiatives, is responsible for building cooperative relationships with capital markets stakeholder groups, and helps coordinate the Deloitte global regulatory network. Heeter is also Chairman of the Business and Industry Advisory Committee to the Organisation for Economic Co-operation and Development (OECD).

Why WEP matters: The UN Women’s Empowerment Principles – one year later

It is a universal maxim that there is strength in numbers. While it’s great when one company commits to investing in women—it’s even better when that number is 170. That’s how many CEOs have now signed the United Nation’s Women’s Empowerment Principles (WEP). And as evidenced by the UN’s one-year commemoration of the launch of WEP last month, that number seems likely to grow.

This event, where I participated as a panelist, took the importance of WEP to a new level. More than 150 executives attended the conference, from such well-known companies as Banco de Brasil, Calvert Asset Management, and Novo Nordisk. The UN Secretary-General, Ban Ki-moon, himself opened the meeting—and there were nearly as many men as women in attendance.

All of this underscored a palpable sense of urgency that seemed to pervade the conference. An urgency that the time to invest in women is now. Not in a year or two when the economy recovers. Not when the dust settles after various laws and regulations take effect, but now. If you want to grow your economy or business and stay competitive, you need to start taking the role of women in organizations and in leadership roles more seriously—and focus on intentional change.

Not business as usual: Realities for professional women

In the past year I have co-authored two reports on women—Paths to power: Advancing women in government and The Gender Dividend: Making the business case for investing in women—and participated in many events, including a symposium at the Harvard Kennedy School, discussing how investing in women can help organizations and countries reap a gender dividend. Yet even with all the attention this issue is attracting, it still seems that change is slow in coming.

Statistics bear out that there is awareness of the potential that women represent. There is movement to change the rules around equal pay, equal access, and equal opportunity as well as a resetting of norms to acknowledge the importance of women’s advancement and economic access.  In many cases, these concepts are validated through legislation and policy.  

But the results are not yet there, the change is not entirely embraced, and the “systems” are not acting in concert with the rules. Working women are still limited by a lack of support networks and mentors as well as near -impossible demands in terms of work-life balance. Yes, there are organizations that value women and choosing to work at one might be the single most important decision a woman can make to ensure her career has longevity and advancement.

But if you are waiting for an organization to drive the new behaviors that will allow it to reap the gender dividend, you may miss important windows of opportunity. So what can you do right now? You can build a personal business case for yourself.

The business case concept put forth in The Gender Dividend was built to argue for an organization’s targeted investment in women. But if we morph the concept ever so slightly, it can also be applied directly to an individual. We are at a moment in history when both top-down and grass-roots approaches can coexist and you, the individual change agent, can serve as a powerful element in the current state of play.  Enough individuals taking action can and will have a significant impact.

As you mentally consider your business case, there are two realities to keep in mind:

The Gender Dividend – Transforming business through the leadership of women

As we begin the second decade of the 21st Century, businesses need to make the most of their resources, especially those with a proven track record in boosting performance. That makes now the time for many more women to take on greater leadership roles, especially in the c-suite and boardroom.

As an accountant for the past 38 years, I have long believed that numbers tell a story. For many years, I have seen a steady stream of research whose numbers confirm the impressive contributions made by the relatively few women at the highest levels of leadership in business today. So it only makes sense that more women serving in these roles will lead to greater business performance and economic growth.

Catalyst, a nonprofit research and advisory organization focused primarily on the advancement of women, invited me to serve on its board a few years ago. I have long been acquainted with Catalyst’s research. Its research findings consistently confirm that those organizations with the most women as senior leaders enjoy rates of return that are greater—often by double-digits—than those with far fewer or no women in their leadership ranks.

That’s what the Gender Dividend is all about. Much like the dividends that public corporations pay to shareholders, the Gender Dividend is a steady benefit that is earned by making wise, balanced investments in developing women as workers and potential leaders, as well as understanding women as consumers and their impact on the economy and the bottom line. Done right, the Gender Dividend should be reflected in increased sales, expanded markets, and recruitment and retention of a key market segment—women.

It is not wishful thinking. As research has consistently proven, the Gender Dividend is a demonstrable fact. But when culture and custom conspire to keep businesses from achieving the greatest returns, investors should take note and vote with their feet. I believe that enlightened investors in search of the greatest returns will vote for those businesses that not only value diversity, but are smart enough to capitalize on it.

Beyond returns in the marketplace for talent and customers, the Gender Dividend can show a payback in the boardroom. As the chairman of Deloitte’s board, I speak often about the ABCs of corporate governance—attitude, behavior, and candor. When present and positive, they help create a boardroom environment that can set ideas into motion and enable people and organizations to move forward productively. Yet it is another element that follows the ABCs—the letter “D” for diverse people and diversity of thought—that enables businesses to enjoy strong governance and develop the best strategic decisions. The diversity of thought provided by women can bring different attitudes and behaviors to the boardroom, as well as fresh candor that can be inspired by a variety of perspectives. Diversity in the boardroom is powerful, and it works.

At the height of the recent recession, Catalyst produced a short video to address the business challenges of a desperate economy. Its voiceover concluded by telling executives that there is an “overlooked yet effective solution to help you make your numbers—and she may be seated right next to you.” I hope that documented research and an open mind will help people understand that such thinking makes perfectly good sense.

Economic growth is one of the quickest ways to unleash transformational change – and with more growth comes more possibilities. In two weeks, the World Economic Forum will convene once again with its mission to improve the state of the world. In the spirit of Davos, let me challenge you, your business, and your nation to intentionally invest in women as business leaders. The women that your investments will enable—as well as the greater returns from the Gender Dividend that it will create—can transform your business, spur your nation’s economy, and improve the state of our world.

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Sharon Allen is Chairman of the Board for Deloitte LLP where she leads the board in providing oversight and guidance to the management of the U.S. Firm and its subsidiaries. Frequently honored for her contributions to business and community leadership, Sharon was named to Forbes’ list of “The 100 Most Powerful Women in the World” for four consecutive years.

As used in this post, “Deloitte” means Deloitte LLP and its subsidiaries. Please see About Deloitte for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

How women can help you beat the competition

Are you looking for your next growth area? What are your plans to beat your competition? Come to think of it, what business exactly are you in? If your answer to any of these questions isn’t talent, then you are running the risk of being left behind. Why? Because growth and competitive advantage will come from innovation and creativity in the 21st century.

As John Hagel III, co-founder of the Deloitte U.S. Center for the Edge, says, “companies must truly become talent-driven firms.” Yet most today are underutilizing, and often downright ignoring, half of their talent pool—their women. Or, put another way, investing in women—both as workers and as consumers—is one of the best levers for creating competitive advantage.

Let’s take women as workers—talented workers—first. Today’s economic realities—from the shrinking taxable workforce in many countries to the importance of critical-thinking, analytical, and decision-making skills in the digital economy—underlie why talent is becoming the most valuable resource for nations and businesses alike. And women not only make up roughly half of the workforce in most of the world, but they are graduating college at higher rates than men in many countries. The World Economic Forum’s 2010 Global Gender Gap Index shows that the educational attainment gap has almost disappeared. But that is not translating into women being retained, developed, and advanced in the workforce. In fact, those numbers are dismal. There has been no change in the percentage of women in senior management among the Fortune 500^® for almost a decade¹. In Europe, where women make up more than half of college graduates and 45 percent of the workforce, they are a measly 11 percent of corporate executives². These numbers mean that the pipeline to the top either leaks women—or that they are getting stuck.

Either way, it’s not good for the bottom line. Churn has a steep price: a conservative estimate of the cost of turnover for knowledge workers ranges is 200 percent of salary. But that may not be the biggest cost to your business. Evidence is mounting that gender diversity (and diversity in general) at the top delivers better business results.  Today, Fortune 500^® companies in the top quartile when it comes to women’s representation on their boards outperform those in the lowest quartile by at least 53 percent on return on equity³.  And in Europe, of 89 publicly traded companies with a market capitalization of over 150 million pounds, those with more women in senior management and board members had, on average, more than a 10 percent higher return on equity than those companies with the least percentage of women in leadership⁴.  Women bring their experiences, perspectives, and approaches to decision making, making it more robust.

But that’s not all—because the other half of creating competitive advantage is to understand the power of women as consumers. Women are not a niche group—they are the market. Already, women control roughly US$20 trillion of total consumer spending globally, and that number is predicted to rise to US$28 trillion by 2014⁵.  And women either make or influence up to 80 percent of buying decisions, on everything from appliances to cars and medical services⁶.  This is not a consumer segment that businesses can afford to ignore—and those with more women in management are in a stronger position to understand and market to this population.

The bottom line—and that is what this is all about—is that there is a Gender Dividend to be reaped by any company or country  that invests in women. But that doesn’t mean businesses are doing all they can to take advantage of it. For many, promoting women is still a “soft” issue—not a business imperative. They have not figured out the cold, hard fact that not capitalizing on women as workers and consumers is holding their businesses back. Which means that if you build your business case for the Gender Dividend, it just might help you beat the competition.

(This column is adapted from our new study The Gender Dividend: Making the business case for investing in women.

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Anne Weisberg is a Director of Talent, Deloitte Services LP, in the U.S. member firm and co-author of Mass Career Customization: Aligning the Workplace with Today’s Nontraditional Workforce.

1 - “2005 Catalyst Census of Women Board Directors of the Fortune 500 Shows 10-Year Trend of Slow Progress and Persistent Challenges,” Catalyst press release, 29 March 2006.

2 - “More women in senior positions: Key to economic stability and growth,” European Commission, January 2010

3 - Lois Joy, Ph.D., Director, Research, and Nancy M. Carter, Ph.D., Vice President, Research, at Catalyst Inc.; Harvey M. Wagner, Ph.D., and Sriram Narayanan, Ph.D., The Bottom Line: Corporate Performance and Women’s Representation on Corporate Boards (Catalyst, 2007)

4 - McKinsey, Women Matter

5 - Michael J. Silverstein and Kate Sayre, The Female Economy, Harvard Business Review, Sept. 2009, see also Sylvia Ann Hewlett, “Why Women are the Biggest Emerging Market,” Harvard Business Online (March 8, 2010)

6 - See e.g., The Economist, A Guide to Womenomics (April 12, 2006); Sandra Lawson and Douglas Gilman, The Power of the Purse: Global Equality and Middle Class Spending, (Goldman Sachs Global Research Institute, 2009)