Diversity in the workplace is an asset for organizations and their employees.
In the discussion around gender diversity in the workforce, 30 is a significant number because research has shown that companies with more than 30 percent women executives are more likely to outperform its peers.
This figure is key, “because it’s where the case for gender diversity in business takes shape,” says Sarah Knibbs, regional director ad interim (a.i.) of UN Women for Asia and the Pacific.
Businesses that have reached this threshold are seeing improvements in performance metrics, including sustainability and representation, explains Knibbs, citing reports from McKinsey , which found positive correlations between female representation and the likelihood of financial outperformance.
The analysis from McKinsey finds that the greater the representation, the higher the likelihood of outperformance where firms in the top quartile for gender diversity on executive teams were 25 percent more likely to deliver profitability than those in the bottom quartile.
Knibbs and Georgette Tan, chair of BoardAgender – an initiative by the Singapore Council of Women’s Organisations dedicated to advancing women into senior leadership positions in the Asian business hub – point to three reasons why gender diversity in businesses improves bottom lines.
Women executives have led the way in presenting the value in environmental and business sustainability, looking into aspects such as carbon footprint, fair trade and respect for communities.
Tan says diversifying the decision-making stage would allow other considerations to be brought into view. “It’s not just about fastest and best way of making money. The view is tempered by what’s the right way to make money? How do we keep in mind the environment, the respect for the communities in which we operate and work in, especially for global organizations. And also, how do we build this pipeline of sustainability?”
Greater diversity of perspectives and skill sets benefits customer and stakeholder representation, leading to new ideas, better decision-making and creative innovation. Whatever your business is, says Knibbs, “if you only represent half of that group, I think it’s clear that you are limiting your opportunities.”
A positive reputation as an equal-opportunity employer builds a loyal, happy and productive workforce – which, in turn, attracts top talent as well as forward-thinking customers and investors focused on diversity and inclusion performance. It can also lead to reduced turnover.
Both Knibbs and Tan acknowledge that gender diversity is advancing at a slower pace in Asia than in the West, due to cultural expectations around women’s roles.
For instance, director appointments of women to the 100 largest listed companies on the Singapore Exchange reached a record 36 percent at the end of December 2022. And among first-time company directors, women’s appointments also reached a record high of 45 percent.
Recent years have seen companies make larger strides in the pursuit of gender-balanced workplaces. For example, the Singapore Exchange issued a mandate in 2021 that requires listed companies to make and disclose board diversity policies, plans and timelines in annual reports, which started in 2022.
Following the listing rules, a joint Singapore Exchange Regulation (SGX RegCo) and Council for Board Diversity study found that 89 percent of SGX-listed issuers have disclosed a board diversity policy but only half disclosed diversity targets. The study highlighted the need to set clear targets, plans and timelines to make the listed company’s commitments toward diversity more tangible.
Tan adds that while the representation of women is weaker in some markets and organizations, there have been sector-wide reforms across certain industries, such as financial services.
Multinationals are also channeling more funding to internal women’s networks for training, education and networking opportunities – not for positive press, but “because it actually is making a difference internally,” she adds.
Tan says it’s about getting women to explore and take on new roles that can help put them on a pathway to success.
Beyond the early steps of simply hiring more women, several new strategies to improve gender diversity have emerged, as more firms recognize its relation to positive performance.
Knibbs has observed more companies across Asia voluntarily owning accountability for gender diversity.
She notes that despite the financial tumult during the peak of the COVID-19 pandemic, there has since been an exponential jump in sign-ups from firms across Asia – in particular, China – to the Women’s Empowerment Principles, which calls for companies to establish high-level corporate leadership for gender equality and to measure and publicly report gender equality progress, among other goals.
She explains that increasing investor focus on diversity indexes was a motivating factor. There are now over 1,900 signatories in Asia – out of a total of about 8,000 worldwide – with sign-ups from multinational corporations, local firms, entrepreneurs of large and small businesses and public sector firms, such as utility companies. WEPs signatories stand in solidarity with the United Nations and signal commitment to end gender inequality in the workplace, marketplace and community.
With this, firms are adopting more formal ways of selecting board members and increasing efforts to monitor and report data on the ranks and promotions of women in their talent pipeline. These steps can help identify the skills and opportunities potential female board members need to gain greater visibility and advance to the next level.
More firms are making conscious efforts to support women’s caregiving responsibilities, Knibbs says. Beyond maternity leave, companies are offering general parental leave, more flexible working arrangements and either childcare credits or childcare facilities at the office.
Leadership in companies across the region are dedicating resources to awareness training to reduce unconscious bias and gender stereotyping, say Knibbs and Tan.
For women, this could mean understanding and addressing implicit associations that may form an unintended invisible barrier to equal opportunity. And on the other end, training can help men shed stereotypes they have about women and become allies who are part of the solution.
Tan adds that women’s representation in the workplace is a demand-supply equation, whether at the board level or lower levels.
“When a board is looking at who to bring in as a director, they create the demand,” she explains. “But on the supply side, are women supported to serve on boards?” Board participation requires, amongst other things, experience with conflict resolution, an understanding of board dynamics and knowing how and when to use one’s voice , and Tan acknowledges that “for that first woman on a board, it could be challenging.”
Citing examples of the common beliefs that women don’t pursue promotions or want overseas postings, Tan says companies need to “have a major rethink.”
She admits, however, that unlearning stereotypes doesn’t happen overnight, and efforts can easily get sidelined. Yet this is one strategy astute firms should persevere at, since it can result in a healthier bottom line, true gender equality and a diverse workforce with different, yet valuable, skill sets and experiences.
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