A blog by Linda Witong, Special Advisor to Advocacy
“On 11 March 2019, I attended a fascinating seminar hosted by the Women’s Political Leaders Global Forum. Leaders were there as attendees and speakers representing every aspect of the global business and political community. Their message was loud and clear. To quote UN Secretary General António Guterres, it was observed that “trust was at a breaking point. Trust in national institutions. Trust in the rules-based global order. Within countries, people were losing faith in political establishment. Polarization is on the rise and populism is on the march.”
The general impression among the participants of this seminar was that today’s challenges were not being properly, efficiently or even more importantly: credibly addressed. For example, in many regions, it was observed that there was a disconnect between the people and those that served them. This also applied to women. It was acknowledged that the number of women in political posts may have increased but the increase in numbers was not necessarily indicative of success. For example, some women had been appointed by a relative rather than elected by their community. These women might also not be educated or understand how to evaluate documents causing her constituency to believe that she was not competent to handle the job and to trust men more as their representatives.
Other women assumed the position as a act of individual self-promotion but also had not built up the knowledge or capacity to handle the demands of their office and, as such, often found themselves in embarrassing or powerless positions. Their communities would then trust men over the women who had failed to represent their community.
Another speaker talked about the “trust barometer” which indicated that 1 in 3 people did not believe that their children’s future would be better than theirs. There needed to be leadership that was ethical and represented who we were both in numbers and the way we looked. They also had to represent the values that we elected them to stand for and then had to deliver the results. However, another problem was that people, in particular young people, no longer viewed leadership as representing them. Young people were also less likely to join a political party or run for office as it was not seen as being a “clean and ethical space.” Again, their view was that all institutions were dated and were not connected with their population anymore. However, ideological disruption connected people in a different way and this speaker could not predict where “ it was going to land”.
Participants gave examples of how this might apply to businesses as well. For example, Julianne Bogner-Strauss, the Federal Minister for Women, Families and Youth of Austria, observed that, although women made up almost 1/2 of the workforce in Austria, less women served on Corporate Boards in 2018 then in 2017. As a result, in 2018, Austria created laws which mandated companies with more than 1000 employees to increase women’s participation on their Boards from 22% to 27%.
Kris Peterson who is America’s Advisory Corporate Governance Leader at Ernst Young, observed that businesses which actually sought to implement the SDGs were likely to be motivated to apply measures involving equality or parity in how everyone, including women, were dealt with. If these goals were accomplished, the company would build a relationship of trust with its employees which, in turn, could create a stronger leadership resulting in an increase of growth of e.g. 15% for that company.
That a company with more diverse representation in senior management will likely achieve greater profits is not breaking news. Those realities initially came to light based on reports from McKinsey & Company, and the Peterson Institute for International Economics. In the most recent McKinsey report it revealed that gender diversity in management positions actually increased profitability more than previously thought. In the firm’s previous analysis, companies in the top 25th percentile for gender diversity on their executive teams were 15% more likely to experience above-average profits. The latest data shows that the likelihood has grown to 21%. It was also determined that gender inequality was not only a pressing moral and social issue but also a critical economic challenge. It was determined that if women—who account for half the world’s working-age population—do not achieve their full economic potential, the global economy would suffer.
While all types of inequality were seen to have economic consequences, the McKinsey Global Institute (MGI) report, The power of parity: How advancing women’s equality can add $12 trillion to global growth, focused on the economic implications of a lack of parity between men and women. A “best in region” scenario in which all countries matched the rate of improvement of the fastest-improving country in their region, could add as much as $12 trillion, or 11 percent, in annual 2025 GDP. In a “full potential” scenario in which women played an identical role in labor markets to that of men, as much as $28 trillion, or 26 percent, could be added to global annual GDP by 2025. MGI’s full-potential estimate was about double the average estimate of other recent studies, reflecting the fact that MGI has taken a more comprehensive view of gender inequality in work. The good news was that investors’ interest was increasing based on this data . Her advice was that, as investors only acted on data rather than beliefs, make sure that you obtain the data as a tool for change.
Another interesting dynamic among businesses was that when companies became more “purposeful” they were more successful, as younger people wanted to work for or purchase items from such a business. This was described as the halo effect which shifted the focus from short term to long term effects and tended to recruit more young people as employees as they were working for a sustainable purpose. An engaged employee increased revenue for the business if they trusted its goals. However, companies had to demonstrate that they did more than talk. They had to demonstrate that they dealt fairly with all of their employees. In addition, along this line of thought was a recent study called the world Benchmark alliance, where new companies were ranked on their performance on fulfilling the goals of SDGs. Business as usual was out the door while thinking outside the box, the need to get out of silos and invest in projects that dealt with the SDG issues was seen to be the new trend”.