Gender parity in leadership positions is not a new conversation. For years, research has shown a correlation between diverse executive teams and stronger financial performance. Still, as we recognize International Women’s Day in 2022, women remain underrepresented on boards – a reality that is impeding progress for women and hindering business growth.
Deloitte’s latest ‘Women in the boardroom’ report revealed that women hold just 19.7% of board seats globally. While this is a 2.8% increase from the previous report in 2019, there remains a wide gap that businesses should bridge to reach gender parity in the boardroom. Perhaps most frustratingly, despite growing conversations on the topic, the pace of progress hasn’t changed much in the last decade; at the current rate, we won’t reach parity until 2045 – more than 20 years from now.
Today, the push for gender equality in leadership is no longer solely driven by those within an organization; society’s expectations of corporations have changed. External stakeholders now support a business for reasons beyond the product or service they offer, evaluating whether its purpose and values align with their own. For many, that includes seeing leadership that reflects the world in which we live – diverse in gender, race, identity, and sexual orientation.
The World Economic Forum recently noted that a high-quality and diverse board can better navigate the myriad of priorities of its stakeholders. Organizations that fail to recognize the value of a more balanced board can bring are actively leaving growth opportunities on the table.
With so many women leaders driving growth in a time of unprecedented disruption and change, the pool of aspiring and talented future board members is rich and diverse. Leading in such a dynamic time has not only broadened and strengthened the skills and experiences of these women leaders, but has also helped prepare them to be stronger candidates in the boardroom – and it is imperative for us to actively identify how to capitalize on this opportunity.
For those already in leadership positions, this opportunity can be addressed in a variety of ways. After all, it’s often through the butterfly effect of small changes over time that people see the biggest impact. Leaders who move beyond the status quo and make strategic moves today can create lasting, meaningful change.
Think before and beyond the C-suite
The pipeline for roles at the highest levels of leadership is often lacking in diversity – not due to a lack of talent but as a result of the cultural and systemic barriers women and other minorities face earlier in their careers. Catalyst noted that in the beginning of 2021, racially and ethnically diverse women represented 17% of entry-level positions, yet only 4% of that group advanced to C-suite positions highlighting continued barriers to advancement to the most senior roles within their organizations. In addition, while white women held 32.6% of total management positions in the US in 2021, racially and ethnically diverse women held a much smaller share at 11.4%.
There is also a lack of women in senior leadership positions more broadly, including in key executive roles up to and including CEO. Globally, women hold just 5% of CEO positions and 15.7% of CFO roles. Since these roles are often what propels executives into board seats, increasing the number of women in the C-suite is vital to increasing the number of women on corporate boards and improving representation at the decision-making table. Furthermore, to help ensure women are prepared to move into a board position, leaders should examine the development practices guiding – or in some cases blocking – the pathways. Recognizing, of course, that these practices begin long before women reach senior levels in their careers.
Initiatives to promote board diversity should start early. More focus should be placed on middle-management levels where women have been driving growth initiatives and leading transformational change yet, ironically, where their careers often stall. By focusing on developing women into the next generation of board members, the pathway to those seats can become clearer, women can be better prepared to step into them and they can be poised to bring the benefits of board service back to their organizations.
Equally important is for nominating committees to keep in mind that not every board candidate has to have a “CXO” title on their resume, but should bring skills and experience that can enhance the performance of the board as a whole. By thinking differently and looking beyond traditional ideas about what makes a good board candidate, organizations can widen their search to find powerful, impactful board candidates who, in fact, may align closely with their purpose.
While board service is an impactful growth opportunity for cultivating inclusive leaders, it also can bring tremendous value and impact back to these individuals’ organizations, broadening perspectives and deepening understanding of the challenges faced in diverse corporate landscapes.
Move beyond mentorship
There’s a correlation between diverse leadership and more robust financial performance. A diverse team is more likely to stimulate the creative thinking that leads to growth and better business outcomes. They will also avoid “group-think” which can lead to complacency and stifle innovation. According to Board Ready, companies with over 30% of board seats held by women outperformed their less gender-diverse counterparts in 11 out of the top 15 S&P 500 sectors.
A diverse board can be a strategic asset, and while mentorship plays an instrumental role in establishing a board pathway for diverse candidates, creating a lasting impact may require moving beyond mentorship toward sponsorship and allyship. By taking mentorship a step further, focus turns to opening up opportunities to women at the middle-management level and creating a more robust succession pipeline with talented, diverse candidates.
Through allyship, leaders can take active steps to both support and advocate for women. A recent report by Change Catalyst found that over 92 percent of people feel allies have been valuable in their career. The impact of allyship is significant and everlasting.
Recognizing the role we can play as catalysts – using our influence to lift up the next generation of women leaders – can help bring us closer to gender parity. And more importantly, this level of allyship – when teamed with sponsorship – can accelerate the career paths of growth-oriented leaders and help expand and develop the next generation of diverse board members.
This is the moment to engage beyond aspiration
In organizations that have a defined purpose strategy, many leaders say their top focus areas are workforce development and diversity, equity, and inclusion. Yet, how many of these leaders are transparent and hold themselves accountable when setting these goals? They should acknowledge that simply aspiring toward these ambitions is no longer enough. Only ongoing action, commitment, and influence can drive meaningful change in board readiness for the women of their organization.
While a majority of C-suite leaders (70%) say their role is highly impacted by purpose priorities, the reality is that an accountability gap remains. Good values alone don’t drive progress – instead, it typically requires inclusive leaders who implement specific interventions designed to achieve equity and who hold themselves accountable as they deliver. This accountability often comes in the form of improved talent practices, sponsorship, and preparing women, especially racially and ethnically diverse women, to be in positions that provide them experiences that will be valued in a board room.
As leaders achieve their goals for building teams of diverse voices and unique perspectives, they can better prepare their organizations for disruption and best prime them for growth.
Beyond organizational leadership, accountability also lies with boards to help ensure they are expanding their own influence and aperture to identify diverse candidates and make visible progress towards increasing diversity within their composition.
True board diversity can offer a wealth of viewpoints and experiences that encompass the ecosystem in which an organization operates, and parity for women is just one step in the journey toward truly inclusive boards. These collective actions, taken today, can help accelerate board parity and better position boards of the future to create value, drive exponential growth, and steer companies in our purpose-driven world. Each step towards greater inclusion can create a butterfly effect of change, and leaders have a unique opportunity to forge a better path for women in the boardroom and beyond.
This year, on International Women’s Day, it’s important to recognize the significant role that all leaders can play in building a diverse and inclusive future, and to recognize that each one of us can be the butterfly by taking steps to bridge the gap to achieving gender parity in the boardroom.
Sharon Thorne is the Chair of the Deloitte Global Board of Directors. Prior to leading the board, Sharon was the Deputy CEO and Managing Partner Global & Strategy of Deloitte North West Europe, and a member of the Deloitte Global Board of Directors.
Stacy Janiak is Chief Growth Officer of Deloitte, responsible for bringing the breadth of Deloitte’s service capabilities and assets to the market to accelerate growth. She is currently a member of Deloitte’s US Executive Committee and Global Board of Directors.
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