Women's leadership is key for global companies looking to tap into $12 trillion worth of new opportunities linked to the sustainable economy, according to a new report.
The Better Leadership, Better World: Women Leading for the Global Goals report released on Monday by WomenRising2030, an initiative launched by the Business and Sustainable Development Commission, argues that companies risk losing out on significant economic value by not having female leaders on board.
“We are at a tipping point when it comes to equality in the workplace,” said Marisa Drew, the chief executive of Credit Suisse’s impact advisory and finance department and one of 25 senior women leaders interviewed for the study.
She added that the report provides a business case for gender-balanced leadership. “Business benefits when all employees have a shared vision of the future – one that is fairer, more inclusive and sustainable.”
WomenRising2030’s study - a call to action for companies to build gender-balanced teams - describes women leaders as "accelerators" that are able to help companies unlock the $12tn “economic prize” associated with pursuing the UN's Sustainable Development Goals (SDGs) - 17 objectives set out by world leaders to end hunger, poverty, and inequality and effectively tackle climate change and resource degradation by 2030.
The $12tn figure was identified last year by the Business and Sustainable Development Commission's flagship report, Better Business, Better World, which found a compelling financial incentive for pursuing sustainable business models, which could create up to 380 million jobs by 2030.
WomenRising2030’s report found that companies with more women on their boards are more likely to invest in renewable power generation, low-carbon products, and energy efficiency. The study also found evidence that businesses with more women in high-level management positions, particularly on directorial boards, are better able to shift their business’s focus from maximising short-term profit to achieving longer-term growth goals.
"Women’s leadership cannot be a ‘nice-to-have’ for business. Companies that continue to have male-dominated leadership will miss out on business opportunities unlocked by gender-balanced teams,” said Paul Polman, chief executive of Unilever and a commissioner for the Business Commission, adding that at the current pace it will take 217 years to achieve gender equality. “That’s bad news for economy and society.”
The Business Commission’s latest report identifies six leadership competencies critical to successfully developing business opportunities in line with the UN's SDGs. These include long-term thinking, innovation, collaboration, transparency and social inclusiveness - with women key to deploying the competencies within more gender-balanced leadership teams.
The Better Leadership, Better World report stressed the lack of female leaders is a global business issue, with women accounting for 5 per cent of all chief executives roles among S&P 500 companies. The UK has a worse statistic; in 2016, there were more male chief executives named David (eight) than female chief executives overall (six) in the FTSE 100.
However, change is underway. The study highlighted promising signs such as a letter sent in January by the world's largest asset manager BlackRock to 367 Russell 1000 companies with fewer than two women directors. The letter asked its recipients to justify how the lack of gender diversity on their boards aligned with their long-term strategies and to report on any efforts to address this imbalance.
The same month, the UN announced it had achieved gender balance across senior management; of its 44 most senior positions, excluding the Secretary General, 23 are now held by women.
“Meaningful change can happen,” said Gail Klintworth, champion of WomenRising2030 and business transformation director of the Business Commission. “First, we need to speak in a language that consistently highlights the positive impacts for individual companies when there is gender-balanced leadership. Second, we need to break out of the echo chamber."
Gender inequality creates an average global income loss of 13.5 per cent due to gaps in occupational choices and in labour force participation, according to figures from the Boston Consulting Group. The figure is the lowest in Europe at 10 per cent and highest in the Middle East and North Africa region at 27 per cent.
A July report by Deloitte found women are still largely under-represented on corporate boards, despite continued efforts to improve gender diversity. The study revealed that women hold just 15 per cent of board seats worldwide with the figure even lower in the GCC at with women holding no more than 2 per cent of seats in the GCC.
Ms Klintworth added: "Business needs to have more open dialogue with both men and women to challenge the status quo, and companies need to prioritise these conversations at every level.”