March 2011 Diversity & Inclusion Best Practice
Addressing unconscious bias and introducing sponsorship schemes increases the numbers of women in senior management and enhances financial performance
The Lord Davies Review was published in the UK last week with recommendations on how to increase the number of women on corporate boards. There is considerable evidence that achieving a better gender balance in top management is linked to superior financial performance and increased shareholder value, e.g.
1. Catalyst research of 353 of Fortune 500 Companies found that those with the highest representation of women in top management, compared to those with the lowest, achieved 35% higher return on equity and 34% higher total return to shareholders.
2. McKinsey researched the performance of listed European companies and found that those with the highest level of gender diversity in top level posts outperform their sector in terms of return on equity (11.4% vs. an average 10.3%), operating result (EBIT11.1% vs. 5.8%) and stock price growth (64% vs. 47%).
Opportunity Now, the gender campaign unit within Business in the Community, the UK’s foremost Corporate Social Responsibility Agency, has published a response to the Lord Davies Review and two of its recommendations caught my attention:
1. “Train senior managers to recognise and act on their own unconscious bias that results in women’s skills and experiences being stereotyped and their talents and abilities overlooked.”
2. “Provide senior women with influential, board or executive level mentors either from within the organisation or from outside it.”
The first of these, addressing unconscious bias, is a topic that these best practices have offered guidance on several times. This requires awareness to be raised amongst senior management of the existence of unconscious bias in their organisations due to their masculine cultures and its potential negative impact on the performance and advancement of women. We do this by using stories, drama scenarios and visual imaginary in workshops for senior managers. Then we involve them in different interactive activities to enable them to identify and adopt the behaviours they need to practise to manage their unconscious bias.
The second Opportunity Now recommendation concerns the role of sponsorship in the advancement of high potential women. Recent research, reported in the September 2010 Harvard Business Review, has shown that mentoring alone may not be enough to enable women to achieve their career advancement aspirations at the same pace as men. Women with sponsors are more likely to be promoted. However, sponsors are not as widely available to women as they are to men in many organisations. Women are half as likely to have a sponsor as their male peers and, as a result, they miss out on the benefits of having a sponsor. A sponsor is someone who acts: on their protégé’s behalf as an advocate for their next promotion; expands their perception of what they can do; connects them to senior leaders; promotes their visibility; opens up career opportunities and gives career advice; offers advice on executive presence; makes connections outside the company. IDC has recently been working with various major clients to help them develop and implement best practice sponsorship schemes to drive the advancement of women into senior management.
IDC considers unconscious bias and the lack of sponsorship as two of the major barriers to increasing the proportion of women in senior management. Our experience of working with clients in these areas and our deep knowledge of the drivers of behavioural change mean that we have an unrivalled ability to help organisations formulate and implement strategies to increase their success in the advancement of high potential women.
Dr Ian Dodds,
28 Feb 2011