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Oliver Balch explains why women will be a fundamental part of reviving the global economy, and setting it on the road to sustainability.
"Gender equality in business is smart economics." This isn't the verdict of a rights campaigner. The words belong to Robert Zoellick, former president of the World Bank. Most of his five-year mandate was dedicated to getting the global economy back on track. Women, he insists, need to be a fundamental part of that story.
Something interesting is going on in the debate around women in business. For decades, it was all about rights. Rights to fair pay. Rights not to be harassed. Rights to maternity benefits. This hasn't gone away, and nor should it. Despite some notable advances, the world of work remains predominately 'pale, male and stale'. An average of one in ten of the world's board seats have women sitting in them, according to a recent study by GMI Ratings. The pick of the bunch tend to be in Europe: in Norway, one third of director positions are held by women.
While the rights agenda hasn't gone away, today we are seeing a new line of argument: the business case. Corporate Inc has some stellar individual female leaders. TJX's Carol Meyrowitz, DuPont's Ellen Kullman and Igredion's Ilene Gordon have all seen their companies' stock price double since taking charge. However, it's the collective influence of women in the workforce that really packs a punch. Fortune 500 firms with reputations for promoting women are shown to be between 18% and 69% more profitable than their less female-friendly peers, a widely cited 19-year study by Professor Roy Adler of Pepperdine University discovered.
Investing in women makes sense for companies at many levels. It comes down to valuing the individual employee, argues the advocacy group Opportunities Now: "Organisations that can attract the right mix of skilled employees will be best placed to compete in the new business environment." In bottom-line terms, that translates into increased productivity, greater innovation, lower absentee rates, better retention, high quality recruitment, and the like.
Expand the focus from individual companies and the macro-economic picture looks equally compelling. Greater participation of women in the workplace would result in a GDP rise of 9% and 13% in the US and Europe respectively, according to research cited by the Women Investing in Women Initiative, a project of the social and economic impact investors Calvert Foundation. In North Africa and the Middle East, among the poorest performers in terms of female labour participation, the rise in GDP could be 25%.
This isn't just theory. Nor is it plain economics. Marilou van Golstein Brouwers, Head of Microfinance at Triodos Bank, can testify to the wider social impacts of investing in women. For the best part of two decades, she has been helping women access credit so they can build their own enterprises. "If you invest in a woman and she has a good business, then her whole family thrives", she notes. Why? Because women typically spend more of their income on household consumption than their menfolk. The families of female-led microenterprises are more likely to be healthier, better fed and more educated, according to the International Labour Organisation.
Where investing in women gets really interesting is in response to the 'what next?' question. Diversity, as far as contemporary business goes, has to be a good thing. Capitalism in its current form – mostly made and managed by men – has arguably run its natural course. Companies must learn to prosper in a more resource-constrained world. That requires balance. Cue more 'feminine values'. Tomorrow's successful businesses will need to beef up in areas such as emotional intelligence, cooperation, holistic thinking and intuition skills, says Danish-British business writer Tania Ellis. These characteristics are associated with women, but are not their exclusive preserve. Ellis is fond of citing Starbucks' (male) CEO Howard Schultz, who describes his leadership style as "sensitive, passionate and responsive". Nor should businesses exclude classic 'masculine values', such as action and competition. We need both, and so the more diverse the team is – not just in gender but in race, sexuality, abilities, nationality and faith – the better.
Ellis' vision of a Yin-Yang hybrid of qualities is already beginning to manifest itself in the social enterprise boom. It is no coincidence that women are prominent protagonists in this emerging sector, says Triodos' Golstein Brouwers. Science seems to back up the idea that women are generally less mono-focused and more socially and emotionally intelligent than their male counterparts [see 'Emotional and Social Competency Inventory', Hay Group, 2012]. This cannot but influence the way they see the world of work, concurs Lucy Carver, Director of Sky's Bigger Picture programme. Women, she argues, "are interested in the large-scale impact of business, but also see the commercial opportunities that being socially responsible can provide, delivering value for both business and society."
Getting the economy back on track can't just mean a return to the 'good old days'. A fundamental re-routing is needed. Let's hope Zoellick has some female voices in his advisory team. If not, he'd better get hiring.
Oliver Balch is a freelance journalist specialising in the role of business in society.
Photos: Digital Vision/thinkstock