It’s time to shift the focus from viewing gender equity action as a business cost and compliance exercise to recognising it as a core productivity strategy.
We have (yet more) evidence to prove the point, with data today revealing that companies boast better sharehold value, more women in leadership and higher retention rates for women when they take strong action on gender equity.
A $1 billion ASX-listed business boosts its company value by close to $93 million when it has gender-balanced leadership, according to the 10th report in the Gender Equity Insights Series from Bankwest Curtin Economics Centre (BCEC) and the Workplace Gender Equality Agency (WGEA).
Less than one in three employers have achieved a gender-balanced workforce (measured as being at least 40 per cent women and 40 per cent men, with the remaining proportion flexible).
But those employers that do achieve balanced executive teams are benefiting financially: achieving an average 7 per cent increase in company value.
This data presents a significant opportunity for employers to reframe initiatives that nurture a pipeline of female leadership talent. It’s about far more than compliance; it’s about productivity and value.
The benefits of companies with gender-balanced leadership include stronger decision-making, broader perspectives, and innovation.
But progress on more women in leadership remains slow and patchy.
While company boards are getting closer to gender parity and women hold 40 per cent of board positions across ASX-listed companies, the proportion of women in CEO and executive roles has plateaued at around 25 per cent.
As for what erodes gender balancing progress, the latest report finds that higher relative resignation rates of women contribute more than appointing and promoting women.
Further, the data shows that appointments alone are insufficient to make it happen, and that companies should prioritise improved retention rates.
There are wide industry disparities in employers that achieve gender-balanced leadership — and those that are trying to catch up on getting more women in their teams will make little progress by focusing on appointments alone.
Indeed, the data finds that companies should prioritise improved retention rates of women across their workforce.
When companies undertake gender pay gap analysis and set targets for gender equality, they become more likely to hire and retain women.
BCEC and WGEA collaborate each year to present a fresh analysis of results in WGEA’s gender equality dataset, which now covers more than 5.1 million Australian employees and 40 per cent of the Australian workforce. Last year, their partnership revealed a slight drop in the proportion of women working part time, while rates for men had remained the same.
WGEAD CEO Mary Wooldridge says this latest report, “reaffirms the causal link between gender composition and company value.”
She added it reveals the simple message that “gender equality is smart business practice and inaction comes with a cost.”
Today’s data comes as employers are now required to meet or demonstrate improvements against three gender equality targets over a three-year cycle.
It also comes as the backlash against diversity, equity and inclusion initiatives continues. As such, researcher Professor Alan Duncan declared in his foreword to the latest report that, “there’s never been a more important time to reflect on the benefits and advantages of gender balance in our workplaces.”
This latest analysis of the WGEA data set provides yet another reminder that equity should be embedded as a core productivity strategy, rather than a compliance exercise. Some employers are catching on and treating gender balance as a core business strategy. But others continue to fall flat in their efforts to tackle the structural and cultural barriers limiting their pipeline of female talent.