In the past few years, we have seen growing commitment and excitement around the world amongst foundations, non-profits, and companies who are re-thinking what achieving gender equity means, and why it is a critical societal imperative. These organizations know what extensive research by the UN, McKinsey, Goldman Sachs and others clearly proves: progressing towards gender equity benefits business and society.
Advancing gender equity offers clear opportunity for companies to create shared value. Gender equity has been strongly linked to higher innovation and business performance—companies with women in more than 10 percent of key management positions have a 27 percent higher return on equity and a 42 percent higher dividend payout ratio compared to other firms.
Beyond the direct positive impacts for business and for society more broadly, the benefits of reducing the gender employment, pay, and education gaps are undeniable. Globally, for example, women-headed households reinvest close to 90 percent of their wages in their households fostering improved child nutrition and higher education levels, leading to a virtuous circle of poverty decline.
Yet, significant additional value for business and the wider economy could be generated through further gender equity. A study from McKinsey estimates that if women were to realize their full economic potential $12 to $17 trillion of additional economic value would be unlocked globally.
We believe that corporations have an important role to play in achieving gender equity. At FSG, we support companies in unlocking the opportunity advancing greater gender equity holds, and are exploring ways corporations can go a step further in integrating gender equity into their business. With the support of Walmart, for instance, we are currently working with workforce development organizations and researchers to explore the types of corporate practices that support the advancement of frontline female workers. FSG has also worked with SAP’s CSR team to develop a new signature initiative focused on boosting technology skills, including amongst women. And in India, we took a broader lens, working with PSI to identify the key market failures preventing women and girls in India from adopting family planning products and services, and to develop an action plan for strengthening the market with private sector partners.
Increasingly, companies have been incorporating gender perspectives throughout different areas of their business. Barclays, for instance, has launched the Women in Leadership (WIL) Index, a first-of-its-kind product that uniquely positions the bank as an innovator in the market by allowing investors to support the idea of superior performance in companies with a higher percentage of women on their boards. P&G, the world’s largest advertiser, is using the power of its brands to uncover and challenge gender bias through its media and advertising. Few companies have succeeded in applying a gender lens across their entire business in an integrated and sustainable way.
To more deeply understand where companies are on the journey to unlocking the full potential gender equity offers, FSG is exploring with leading companies around the world what can be learned from past efforts, and what new thinking and approaches are needed going forward.
This year, we have engaged dozens of companies in interviews and discussions, hearing about the common challenges companies face when trying to apply a gender lens to their businesses and unlock new value. These conversations have uncovered a series of topics that are on the minds of business leaders that we will explore in the coming months, such as:
- How can companies better align gender equity with business strategy and objectives? How can shared value serve as a framework to meet these objectives?
- How can companies leverage corporate assets to wade in into new, uncomfortable areas to pursue gender equity?
- How can we partner effectively across sectors to address gender challenges?
We see this as a two-way dialogue and look forward to engaging with practitioners, experts, and business leaders who are passionate about advancing gender equity and in turn, generating business value. Please reach out to Laura Herman if you are interested in learning more about this work.