Research shows that having women on a company’s board of directors leads to better financial performance and a better gender mix among senior managers is linked with greater results.
The marketing Holy Grail of authentic consumer engagement goes a lot easier when the workforce of a business reflects the demographic of its target consumer.
In the post Lean In world, there is a groundswell of discussion on the subject. Voices for both gender equality in hiring and compensation and ethnic diversity raise awareness, build communities, and share best advice. All very important, but on their own, not enough to move the needle significantly.
According to research firm Catalyst, in 1995 there were no women holding the CEO spot at a Fortune 500 company. In 2014 that number grew to 23. At this pace, getting to an even split between male and female CEOs at Fortune 500 companies will happen sometime in the year 2204. Good news for your great, great, granddaughter. And there are only about five black CEOs at the country’s 500 largest companies.
As more women and diverse executives land in the top spot, we can hope the pace will pick up exponentially, but unless corporations and government put some muscle behind the issue, I am afraid we are, at best, destined to creep along when it comes to inclusion in the senior ranks.
Businesses tie success measures to mostly everything – revenue, CSR, market share, and philanthropy. Why not add inclusion to the list and reward an executive team financially for creating a more diverse business? Couldn’t a VC firm require diversity standards before a company gets funding?
Lack of a legislative mandate is a reason female representation in US boardrooms is at 17% compared to countries in Europe that have signed legislation. Germany, Norway, Spain, France, and Iceland have set minimums at 40%, Italy one-third.
For the needle to move on inclusion, it needs to be handled like a real business metric, with accompanying rewards and penalties. Making laws around the issue clearly will make a difference.
At this stage there needs to be something that builds a foundation for there to be any hope of correcting the issue organically and sustainably, and at a point that is a bit sooner than 200 years in the future.
Bernadette Casey is executive editor of PRWeek. She can be contacted at firstname.lastname@example.org