Which country does not want to grow and which corporate does not want to make more profits?
A whopping 12 trillion USD could be added to global GDP by 2025. McKinsey Global Institute reports that if every country matched the progress towards gender parity of its fastest-improving neighbor, the world GDP can increase by 11%. Imagine—just by advancing women's equality. The biggest increase of 16% is expected in India.
There's been ample research to prove that women in the workplace make business sense. McKinsey also found that gender-diverse companies outperform others financially by 15%. Gender-balanced teams are more innovative—a trait that will determine the difference between growth and elimination in today's fast changing world.
IMF's research shows that higher participation of women in the workforce can increase the GDP of countries—by 5% in the US and by 27% in India. Empowering women is key to faster growth and sustainable development. This has been researched, proven, spoken and written about, loud and clear.
One woman on the board (family member or not) is often a token, two is a presence and three constitutes voice.
Yet in this "Lean In" era, the pace of change is painfully slow. And there does not seem to be any urgency to make it happen! At current rates of change, the World Economic Forum (WEF) estimates it will be 118 years before the gender gap is closed worldwide. We will just not see enough women leaders. You might wonder, so what?
Not only does that mean that even our daughters and granddaughters will not work and live in a world of equal opportunities, but it also points to a massive economic loss.
The Indian story is indeed disappointing.
Amidst transformational changes towards a Digital India, Make in India and Smart India, India stands at the 87th position in the Global Gender Gap Index. India is the only developing country which has witnessed a 10% decline in women's participation in the labour force in the last decade. And India faces a growing talent shortage, a concern for 48% of employers here. Without doubt, a major untapped reservoir of talent lies in India's underutilised female population. How can a country truly develop if it locks out half its population and half its talent?
The traditional professional development pipeline is broken. In India, women make up 42% of new graduates but only 24% of entry-level professionals. Of these, about 19% reach senior level management roles. Women hold only 7.7% of board seats and just 2.7% of board chairs.
Hiring, retention and growth of women—all seem to be a big challenge.
To gain momentum and drive change, we know women need to act, but not on their own. Women have been asked to lean in! And in our opinion, they are doing so—at least more than before. But the environment around women has not changed sufficiently for them to overcome the hurdles to join, stay and rise to leadership roles.
An interesting case discussed in the FT Women Conference in London was the need for re-examining the job-posting vocabulary because certain words like "ambitious," "dominant," and "competitive" can be off-putting for women. A study published in the Journal of Personality and Social Psychology in 2011 compared over 4000 job ads and found that masculine wording in job advertisements leads to less ob interest among women. Similarly, many other hiring and work practices—such as all male interview panels, unavailability of crèches, focus on face time vs. output—are reflections of biases that impact women.
Many hiring and work practices—such as all male interview panels, unavailability of crèches, focus on face time vs. output—are reflections of biases that impact women.
One key driver for change is leadership committed to gender parity. Christine Lagarde has made this centrestage to the IMF's work and policy dialogues in countries. During the tenure of president James Wolfensohn, the World Bank achieved much progress in promoting women to leadership roles. Nearer home, K.V Kamath and N. Vaghul built such a strong pipeline of women leaders that today's banking sector in India is reaping its benefits. According to an analysis by the ET Intelligence Group, 7 of the 17 women CEOs in India are from the banking and financial services industries. But leaving the change to one leader will only take us so far.
We need to create a network of men and women across sectors to drive, experience and accelerate this change. Gender diversity needs to be woven into the very fabric of our business, our supply chain, our employees and our customers.
India is progressing in some areas. The most recent extension of maternity leave from 12 to 26 weeks made headlines in the media; India climbed the global ladder to third position in the world in terms of benefits for working mothers. Men and women cheered the change. While the intention was noble, will the impact be the reverse? Could India have extended the leave as parental time off, leaving it to the parents to decide who will spend how much time to bond with the child?
In an interview, a chairman at one of the leading oil companies so proudly remarked, "I see my child growing, not in height, but in length." With majority of childcare responsibility falling on the mother, more fathers will see their children only in bed, growing in length indeed! Are we not depriving fathers of their need to spend time with their children?
Similarly, on SEBI's rule for at least one woman director on the board, Indian companies were forced to find women directors. Now 88% of all listed companies have at least one woman director—though many women inducted were family members. Initially, it seemed this was unfair and would defeat the purpose of diversity. On second thought, if sons and nephews could be inducted, why not daughters and nieces?
Yet, one woman on the board (family member or not) is often a token, two is a presence and three constitutes voice.
India has no shortage of qualified and competent women, organisations need to be innovative to find them.
So if we are serious about diversity at the board, we need to get more women into boardrooms. Many complain about the lack of qualified women. The same few women sit on multiple boards. Either we are not looking hard enough or we are not investing in building a leadership pipeline. Currently India faces both! India has no shortage of qualified and competent women, organisations need to be innovative to find them. At the same time, strengthening the pipeline of women leaders across sectors needs immediate attention to further enlarge the pool of future women leaders.
Let's bring women to the table, in the halls of Parliament and in boardrooms. And then cherish the trickledown impact on policymaking, legislation, infrastructure and organisational structures.
At his swearing-in ceremony, Canadian Prime Minister Justin Trudeau was asked why he had appointed a gender-balanced cabinet, a first for Canada. He replied "Because it's 2015."
Exactly our point!