There is a growing body of research that suggests a positive correlation between gender parity and business performance.
McKinsey's "Delivering Through Diversity" report found that companies in the top quartile for gender diversity on their executive teams were 21% more likely to experience above-average profitability than companies in the bottom quartile. The Peterson Institute for International Economics conducted a global survey of more than 21,000 firms in 91 countries, and found that having women in corporate leadership positions is positively related to firm profitability. Specifically, the report found that the presence of women in corporate leadership positions is associated with a 15% increase in profitability.
A study by the Boston Consulting Group (BCG) found that companies with more diverse management teams have higher innovation revenue. Companies with above-average diversity scores generated 45% of their total revenue from innovation, compared to just 26 per cent for companies with below-average diversity scores. A report by the Credit Suisse Research Institute found that companies with at least one woman on their board outperformed all-male boards in terms of share price performance and return on equity.
Clearly, gender diversity in the workplace is not only a matter of social justice and equality but also makes good business sense. Yet, few Indian businesses are driven by this agenda. As a nation, we are ranked 140 amongst 156 countries in the WEF Global Gender Gap Index. Women employees represent only 23 per cent of the total workforce, and the parliament has not even 15 per cent of women representation. Just 14.6 per cent of Indian companies have a female CEO, and the percentage of women on boards is 17 per cent. The data highlight the need for greater gender parity.
Gender parity and pay parity go hand in hand in order to ensure that such initiatives continue to progress. Indian enterprises can find inspiration from global best practices and success stories. Companies like Sodexo, L’Oreal, Schneider Electric and Accenture have almost achieved gender parity in senior leadership teams, and have seen the results of this effort on their performance.
Pay parity, or equal pay for equal work regardless of gender, is an important issue for companies around the world. While many companies are making progress towards achieving pay parity for women employees, there are still relatively few that have achieved it fully. Salesforce.com was one of the first to achieve pay parity way back in 2016. Adobe, BHP, Ikea, L’Oreal and Roche are some of the other leading global giants that did it.
It is important to note that while these companies have made significant progress towards gender and pay parity at the top, there is still more work to be done to ensure that all companies are inclusive and equitable for all employees, regardless of gender.
What best practices can Indian enterprises adopt to drive gender parity, and therefore better business performance?
Muneer is a Fortune 500 consultant, author, startup investor/mentor and co-founder of the non-profit Medici Institute. Twitter @MuneerMuh