Why is gender parity in corporations important? Let’s take a look at the numbers.
- Who is the customer? As a group, women dwarf – by a factor of ten – the buying power of all other demographics. Women make 85 percent of all purchasing decisions in U.S. families. So if you are a corporation, like Procter & Gamble, Kimberly-Clark or General Mills, that supplies a good number of the items on grocery and drug store shelves, wouldn’t it make sense to have some women running the show? Or at least have half of the major corporate decision makers be women?
- Gender parity is a strategic imperative, and for more reasons than just the customer. According to several studies, companies with more women in management (more than 38 percent) experience lower share price decline, higher return on investment, and higher total return to shareholders. Furthermore, companies with more women in senior management or on boards of directors are more profitable, have higher firm value, and higher earnings quality.
- Given that women are now half the workforce in the United States, and with the upcoming retirement of the bulk of the baby boom generation, companies can’t continue to do business the way they have been. A five percent difference in attrition between men and women over 10 years results in twice the number of men as women in senior ranks.
Although blatant gender discrimination is becoming more rare as the years go by, subtle and unwitting assumptions and actions by otherwise well-intentioned senior managers still hold women back. Some of these barriers are:
• Myths surrounding women’s work ethic or goals. For instance, 82 percent of working women want to become senior leaders, but less than a third of them think they have an opportunity equal to men.
• False assumptions about women’s capabilities or interests in taking on “non-traditional” jobs such as running a construction project or manufacturing plant.
• Failure to assign key clients or challenging projects to high-potential women.
• Risk avoidance in recruiting and promotion practices. Most companies pattern the successful candidates after who’s at the top — usually a man — so those who are promoted tend to mirror those already there.
• Reward systems that favor individual contributors (such as forced rankings) and subtle language reflecting “manager = male” biases.
• Exclusion from powerful but informal networks.
• Women’s failure to ask or negotiate for higher pay, more challenging assignments and a seat at the table.
• Management’s assumptions about women’s ability to balance her home and work lives.
If women are such important constituents, why do companies systematically relegate them to lower class status? Most companies’ leaders actually think that they are doing a good job at increasing gender diversity. By contrast, only one in four employees feel their companies are focusing on gender parity as a strategic imperative.