Leveraging Gender Diversity To Yield High Financial – And Human – Returns

This interview by Christopher P. Skroupa was originally published on Forbes.com on October 14, 2015

Building on a background as a Business Lawyer and a State Authorized Public Accountant, Helle Bank Jorgensen brings more than 25 years of experience advising global companies and investors within Corporate Responsibility and Integrated Reporting.

Helle has led PwC’s Sustainability and Climate Change practice in Denmark and in the US, hereof 11 years as a Partner. She now runs B.Accountability advising global businesses and heads the Global Compact Network Canada. In 2014 Helle was chosen as a UN Global Compact Board Facilitator. Helle is also the chair of eRevalue and is a known speaker and author of articles and books and the first in North America to have passed the GRI G4 Exam.

Christopher P. Skroupa: Why is gender equality important to you?

Helle Bank Jorgensen: Because I’ve seen so many examples where business and societies waste 50% of their resources. Also, because I would like my son to grow up in a world where it’s the quality of what he brings to the world and to businesses that determines his possibilities of achieving what he wants to do and become in his life.

Let me tell you a story; my mom had to leave school and start working when she was 13, while her little brother could continue in school and get an opportunity for a better life. It was the norm, and in many places globally, it is unfortunately the norm of today. Needless to say, my mom was happy when I became a Partner with one of the Big4 accounting firms in the country I grew up in. However, I was also the first female partner to have a child, and I became a role model for many women who are way smarter than I, but who have fought hard to break the glass-ceiling or worse, gave up on their dream of either becoming parents or on their dream position.

I have been fortunate enough to have both – and to travel and work in many countries. Unfortunately, I have seen how people are treated based on their gender rather than their knowledge and talents. This is and has been very costly to societies, to business and perhaps to the future of our children and grandchildren.

Skroupa: Why is gender equality important to business?

Bank Jorgensen: It makes business sense. Most smart business leaders would agree that Diversity of Minds in the Boardroom, in the c-suite and in the workforce mean better business. Diversity of Minds does not necessarily mean gender-diversity, but to exclude 50% of the talent does not suggest diversity of minds. And an analysis conducted between April and June 2015 by Grant Thornton reported that the few S&P500 companies that have male-only executive directors missed out on USD 567 BN of investment returns, compared to companies with more diverse boards and women executives.

Further, female graduates in the developed world are now as or better educated than men – so business that is looking to attract and retain talent would be wise to look at the full workforce and ensure gender equality.

Besides the business imperatives, gender equality is a fundamental human right and one of the Sustainable Development Goals that was adopted by all UN member states on September 25th this year. The Sustainable Development Goals (SDGs) have been developed with leading businesses via the UN Global Compact.

The Women’s Empowerment Principles (WEPs), a joint initiative of UN Women and the UN Global Compact, focus on the role of business in achieving gender equality and provide seven Principles for business to follow, covering the workplace, value chain and community. The initiative has grown to more than 1000 signatories globally, and we see an exponential interest. It is a rolling snowball – and you can either get behind it, or try to outrun it with the danger it could have to talent attraction, reputation and financial return.

Gender equality not only makes business sense – it makes world sense.

Skroupa: What are leading businesses doing? What is the business case, and why?

Bank Jorgensen: Leading businesses are signing the CEO Statement of Support for the Women’s Empowerment Principles I talked about. Even though it is called Women Empowerment principles – it is about treating all women and men fairly at work. And I expect that all parents would like to see their kids treated fairly in school as well as in their workplace.

The business case is clear – 50% of the talent in the workforce and 50% of the global consumers are women. Furthermore, women are often the person in a household who directly or indirectly decides what products to buy and what investments to make. So as women get more and more buying and investment power, it will often be the businesses that are known for gender equality that will get positive attention. Further, it is a general trend for millennials, as 70% in 2014 reported that they’d be likely to make investments based on social issues, such as gender equality. So the ingredients in the business case are talent attraction, reputation and financial return. Apart from this there is a human return – as you will see your children grow up in a world where you know they are treated fairly.

Here is an example: A global beverage company launched a multi-country initiative to enable the economic empowerment of 5 million women entrepreneurs across its value chain by 2020. Among other things, the initiative provides women with business skills training courses, access to financial services and access to support networks of peers or mentors to address the barriers they face to business success. Needless to say that they build goodwill, great brand power and future talent pipeline with such initiatives.

Skroupa: You argue that women sometime should say no to Board positions, why is that?

Bank Jorgensen: As both the business case and soft and hard regulation point to having more women serve on boards, more women will be asked to serve – and that is a good thing. However, women, as well as men, will need to do their due diligence, and not just be flattered by being asked. I wouldn’t like to see women or men accept board positions and then face the growing risk of financial and reputational hardship that the ‘wrong’ board position could bring. As a facilitator for UN Global Compact Board Program, I see how boards of directors are under increasing scrutiny and increased pressure. A chairman once told me, “Today everything is 10 times as big, also 10 times as quick. Technology, mobility and digitalization keep everyone awake. It is easy to understand that CEOs and management can’t last as long as they used to, when transparency and knowledge were more limited.” When discussing the role of the Board, it is often clear that the board members have blind spots that, if not illuminated, can result in reputational damage, legal consequences, remuneration impact and removal from the board.

I also see how programs such as the Board Program can disrupt the normal thinking and bring insight that can help reduce risks and create opportunities. The Board Program enables all board members, including newly appointed women, to ask the key questions to disrupt group-thinking and bring value. But as mentioned, start by doing due-diligence and ensuring you’re informed on the growing number of regulation that represents a civil and criminal liability if breaching the duty of care.

Skroupa: So what should we do to get to gender diversity?

Bank Jorgensen: Besides the suggestions I’ve given earlier I would suggest five steps:

1. Take stock – measure so you can manage.
2. Identify, discuss and tackle the barriers in the organization – including the unconscious bias we all have.
3. Show leadership – an honest dialogue with the leadership and a commitment from the c-suite and board of directors, combined with a well-thought-through action plan and clear goals and targets, are often necessary.
4. Ensure the spoken and unspoken incentives are aligned with the goals – and treat all who do not comply as you would if they weren’t complying with the financial guidelines. In the end, if the diversity work is only an exercise in public relations, it could hurt the financials.
5. Be accountable and transparent in your communications and reports on the challenges of instilling diversity in workplace culture. Collaborate with other companies to find and implement solutions that will make certain the company, suppliers, communities and future workplace eventually won’t need a diversity policy in place to ensure this.