Creating a fair and equitable workplace is essential to securing improved employee engagement, enhanced productivity, strong financial performance and an inclusive culture. An integral aspect to this is providing equal opportunities for everyone, irrespective of differences, real or perceived. By excluding or limiting opportunities for women in leadership positions, you will also lose an invaluable chance to tap into their potential in order to drive better business outcomes.
Over the years, the gender imbalance has been a continuing concern for Australian businesses. Amongst individuals holding leadership positions at top, ASX-listed companies, one is more likely to find senior executives named Peter, John or David than Sarah, Rebecca or Michelle. The first-ever ASX200 Senior Executive Census by Chief Executive Women in 2017 mirrored this trend.
- Women accounted for a little over one-fifth (21 percent) of ASX200 executive leadership teams
- 5 percent of women are CEOs, while 9 percent of women are CFOs
- Over 20 percent of ASX200 companies have no women in their executive leadership team
- Over 60 percent of ASX200 companies have no women in line roles
- Only 8 companies amongst the ASX200 had 50% or more women in line roles within executive leadership teams
On the plus side, a recent McKinsey&Co report found that Australia outperformed the US (19 percent) and the UK (18 percent) in relation to women’s representation within executive leadership teams. Whilst this demonstrates a willingness to effect change, there is immense potential for Australian businesses to improve gender representation and bring equality to the boardroom.
Case for change
Several factors underscore why the need to achieve gender parity in leadership positions makes commercial sense.
Improved financial results and performance
The 2017 Delivering through Diversity report by McKinsey&Co found companies with gender diverse executive teams possess a positive correlation with profitability and, therefore, improved financial performance.
Furthermore, the report noted that the executive teams of high-performing organisations that secured above-average financial results had a higher representation of women in line roles versus staff roles.
An all-male executive leadership team can negatively impact decision-making outcomes through the adoption of a myopic view. Female leaders bring a fresh perspective to processes and perceived risks, which enables them to provide countervailing considerations leading to more balanced outcomes in the effects of decisions made.
Women are reported to control or influence the majority of household spending in Australia; this is why it’s imperative for businesses to appeal to female consumers. Companies with women who have a seat at the decision-making table can help businesses better understand how to effectively target this segment.
Achieve pay parity
Higher representation of women in executive leadership positions positively impacts the achievement of pay parity across all levels of the organisation. A study by the Workplace Gender Equality Authority found organisations with women representing an equal share of executive leadership positions secured a 50 percent less pay gap than those with fewer women in these positions.
Closing the pay gap positively impacts employee productivity. A 10 percent reduction in the pay gap has the potential to boost productivity by 3 percent in the long-term.
Create an inclusive culture
Women in leadership positions can influence policy-making, whilst establishing procedures that create an inclusive workplace environment. Providing flexible work options, promoting a safe and inclusive atmosphere, and encouraging diversity across teams can all positively impact employee engagement and productivity.
Break the ceiling
Achieving equal gender representation on executive teams is a long-term goal that involves sustainable effort and measurable outcomes. Here’s where businesses can start:
A continuous training and development program enables employers to identify high-performing women across functions and progress them into line roles, subsequently opening a pathway to executive leadership positions. This allows organisations to recognise, reward and retain competent female employees, whilst providing career advancement opportunities.
Delivering female mentorship programs is an excellent way to nurture high-calibre female employees, and to provide the preparation required to transition them into executive-level roles.
Flexible work options support everyone – men, women, carers, non-carers, managerial and non-managerial staff members. Companies must shift current perceptions of flexible workers as those who are “less committed”, and encourage flexible working practices to allow employees to thrive and deliver results.
Employers need to re-think how managerial roles are designed to accommodate flexible working options, including reporting structures and rewards linked with these roles. In doing so, not only will they retain competent staff, but also broaden their talent pool for future opportunities.
In advancing gender diversity within an organisation’s leadership structure, define goals and set a timeline. Targets can be implemented at different levels, starting from the hiring process to leadership development programs and mentorship opportunities. Map the outcomes of efforts invested to ensure achievement of improved representation at all levels.
Nurture an engaged community
Greater gender diversity in executive leadership has a multifaceted impact: creating an inclusive culture, improving employee engagement, driving productivity and securing stronger financial returns. This enables organisations to better engage with the communities they serve, thereby generating higher brand recognition and consumer affinity.
Recommended resource: We’ve put together a complimentary guide for you on “Employee Benefits: Talent magnet or Necessary cost?“; prepared by CEB’s International HRD Forum and Flare HR.