Female empowerment and balanced leadership are good for business
According to research by McKinsey & Co., women only contribute 37 percent of global gross domestic product (GDP). As much as $12 trillion could be added to global GDP by 2025 if the gender gap was narrowed. That is the size of the GDP of Japan, Germany and the UK combined. But it is not only about the financial aspect; Diversity is important for global society. Most visionary business leaders worldwide have signed up to the UN Sustainable Development Goals — which since 2016 include gender equality — and seek to attract the entire talent pool to their organizations. But when it comes to advancing women to the pinnacle of management, the pipeline seems to dry up across most industries.
It is vital to prevent the loss of highly educated and trained female employees as they move up the talent pipeline. According to the World Economic Forum report “The Future of Jobs,” women today represent 56 percent of college graduates but hold just 15 percent of senior roles and only 9 percent of CEO positions worldwide. Think about these figures. If you have children, should your son really have a 17 times higher chance of becoming a CEO than your well-educated daughter, just because of gender?
In addition, the recent McKinsey study “Delivering Through Diversity” found that companies with the most gender balance on executive teams were 21 percent more likely to experience above-industry-average profitability. The International Monetary Fund has substantiated this claim regarding the financial impact of female empowerment with the largest study of its kind, across 34 countries and 2 million companies that showcased the positive correlation between gender diversity in senior positions and financial performance in terms of corporate return on assets. It is the diverse company that is positioned to thrive in the corporate worlds of today and tomorrow.
Reaching gender parity means taking the macro, as well as the micro, perspective so all skills and capabilities are not only developed through our education systems, but also utilized to their full potential afterwards
Tine Arentsen Willumsen
Some of the most compelling and well-documented advantages gender-balanced leadership teams provide are: A higher degree of innovation; greater robustness against the tide of disruption; better decision-making, as more issues and challenges will be reviewed and solved; a wider set of capabilities; attraction and optimization of the entire talent pool; matching wider market opportunities and client segments; and higher potential for growth and profit. But though we have seen global progress in recent years, there is still a lot of work to be done before gender balance is reached. In my experience, both at board level and in the minds of modern C-suite leaders, it is obvious that we need to accelerate this agenda, but what is less obvious is exactly how.
At Above & Beyond, we consult numerous large companies on their diversity strategy and have pinpointed and created several key tools to accelerate female empowerment in the corporate sphere. This kind of transformational change must be led from the top, by the personal vision of the CEO, while inclusive leadership must be practiced across the entire organization in order to appreciate all the talents of a diverse workforce. An “all-in” holistic approach is the only way we will finally turn the conversation into action, proper focused investments, and achieve real change.
To structure the necessary processes and help more companies reach their ambitious goals, I decided to establish a strong corporate alliance in the Nordics called the Diversity Council, and was immediately encouraged by companies such as McKinsey, Maersk Line and PwC, as well as Denmark’s Central Bank and Foreign Ministry, which signed up as founding partners. They all wanted to meet other global, like-minded organizations and share their diversity and inclusion challenges and initiatives, look for synergies and drive real change, both for their own organizations and society at large.
The Diversity Council brings together all levels of the partner companies with cohesive engagement from senior management to employee level. The cultural transformation empowered by the council is rooted at the very top, with the vision of the CEO and the head of human resources, as well as corporate communication. At the same time, our cross-industry Advanced Leadership Program for Women and Fast-Track Program for Emerging Female Managers build and strengthen the pipeline by empowering female leaders company-wide.
The leadership programs are tailor-made with professors from world-class universities and designed with our global partner, the Financial Times IE Business School Corporate Learning Alliance. The entire program is created based on research related to the barriers preventing women reaching the top and why the talent pipeline — not the women — needs to be fixed.
All the women in our programs are given a dedicated influential cross-industry mentor. Such mentoring companies can also organize this themselves, as it is a great way to enhance capabilities and share leadership challenges with someone else with additional experience.
Reaching gender parity means taking the macro, as well as the micro, perspective so all skills and capabilities are not only developed through our education systems, but also utilized to their full potential afterwards. It is time for business leaders to team up and invest together with politicians to accelerate change, much in the same way as Saudi Arabia’s Vision 2030 shows the government’s commitment to bringing more women into employment.
It is excellent to see International Women’s Day being celebrated worldwide in so many ways this year. I am thrilled to fly to Dammam to contribute to Saudi Aramco’s activities, which in a very visionary way also engage men and male leaders in the quest for balanced leadership and inclusion. Together we are stronger.
• Tine Arentsen Willumsen is CEO of the Above & Beyond Group and Founder of The Diversity Council