Roadmap to Gender Equality: Treat it like a Business Priority

Despite a commitment to advancing women, many companies across Canada and the U.S. are lacking clear goals, the ability to measure progress or accountable leaders to drive progress. There is a real opportunity to accelerate the advancement of women by closing the gap between commitment and action. The good news is that significant research exists to guide companies in creating action plans that can accelerate the slow progress that has been made to date.

The business case for gender diversity is strong: data pulled from hundreds of companies in 2017 revealed that companies in the top quartile for gender diversity on their executive teams were 21% more likely to have above-average profitability than those in the bottom quartile. And, companies with above-average diversity on their management teams reported 45% average innovation revenue, compared to 26% for companies with a below-average diversity score, based on global surveys. As companies continue to experience significant disruption from technology, we expect the business case for diversity to grow even stronger with the increased need for innovation.

While diversity is widely recognized to help drive innovation and is critical if a company is truly tapping into 100% of the available talent, the facts demonstrate that many companies are missing this opportunity, especially at the senior leadership level. 

Less than 5% of the companies in the S&P 500 are led by women, only 22% of their directors are women, and women comprise only 11% of these companies’ top earners. Our research found that just slightly more than half of companies have made progress in the advancement of women over the past five years.

The final report from the Canada-U.S. Council for the Advancement of Women Entrepreneurs and Business Leaders includes findings from original quantitative research that encompasses the perspectives of 400 Chief Human Resources Officers (CHROs) or people in equivalent roles from small, medium and large companies in Canada and the U.S.

Our research found a crucial disconnect: despite the commitment from many leaders to advancing women, many companies are approaching the advancement of women without basics, such as leadership accountability, data measurement, targets and clear action plans. For example:

• Less than half (36% in Canada and 40% in the U.S.) of companies surveyed have a plan to advance women to senior leadership roles. 
• Nearly half (48% of Canadian companies and 41% of American companies) do not have accurate data on the percentage of women at the management level.
• Less than 40% of companies in both Canada and the U.S. look at pay by gender.

The research also found that small companies with 51-499 employees are more effective than larger companies at advancing women and making progress toward gender equality—they make more progress in advancing women at the manager level and above and in the advancement rates of women, and they also have more committed CEOs.

It begins with treating diversity like a strategic business goal. Think about what that means: if growth is your goal, you create a clear action plan, set revenue targets, measure progress and hold leaders accountable. Companies should use this same discipline and rigor when creating their strategy for advancing women.

To make real change, we recommend all companies follow the lead of the “High Risers”—the 26% of companies surveyed that reported their company is making either “some” or “rapid” progress in the advancement of women in their organizations. To approach the advancement of women systematically, companies should employ five key elements of a strategy for achieving gender diversity in leadership:

1. A business priority and leadership commitment: C-suite executives should decide that the advancement of women is critical to achieving the company’s business goals, and then clearly articulate their commitment to employees. 84% of High Risers report that their leadership is committed to gender diversity, compared to just 48% of other companies.
2. Capture data and measure progress: This research reveals a lack of essential data that could measure progress and identify potential obstacles to the advancement of women, such as high attrition rates among new mothers or the differences in attrition between men and women. High Risers collect data and utilize metrics at a higher rate; 58% of them track five to eight metrics, compared to 28% of other companies.
3. Hold leaders accountable: 67% of CHROs in Canada and 72% in the U.S. say there is someone on the senior leadership team who is accountable to the board on issues of gender equality. Beyond accountability to the board, the lack of basic measurement and plans for the advancement of women to senior leadership roles indicate that companies are not holding leaders across the business accountable for making progress. 
4. Set targets: 67% of companies with six to eight targets report making progress in the representation of women at the executive level over the past five years, compared to just 40% of companies with zero to five targets.
5. Leverage existing research to create action plans: There are many research studies published, including reports by Catalyst and multi-year studies by Accenture and McKinsey/Lean In, that identify the actions a company should take to have a more diverse and equal workforce. Companies can use this significant body of research and insights to help them design their action plans. 

The time to act is now, and the benefits will only increase. The need for continuous innovation is growing as companies across all industries are disrupted by new technology, and diversity will help them succeed. The good news is there is a roadmap of clear steps that companies can take to accelerate their progress now.