I recently attended the World Economic Forum in Davos, Switzerland. Founded in 1971, this annual summit attracts thought leaders from around the world to discuss the most relevant topics in business, government, and civil society. This year boasted 3,000 attendees including CEOs, heads of state, Silicon Valley entrepreneurs and finance ministers.
In keeping with tradition, the 2016 gathering was anchored by a series of panel discussions. Of the many topics being explored, gender parity was one that held particular significance for me. Diversity and Respect is one of our core corporate values, which puts gender parity front and center on my agenda. I firmly believe in establishing equal opportunities within the workplace. At Alghanim Industries, we are putting these beliefs into action through a range of policies and initiatives designed to help close the gender parity gap.
Closing this gap is also at the top of the list for many companies worldwide, and IMF statistics suggest that the Middle East gender gap is three times wider than in most developing economies. Needless to say, we have lots of room to improve. For these reasons, I was honored to participate in the panel discussion on gender parity in Davos. It was, in fact, one of the highlights of my visit.
Most of the session was devoted to the lack of women in the talent "pipeline", in other words, the scarcity of women inside organizational talent pools. It's interesting to note that gender parity at entry level is not the problem. Around 50 percent of employees at this level are women, several panelists noted, and they tend to be paid the same as men in these positions.
The real issue for organizations arises as women begin climbing the career ladder, where we see a higher female dropout rate and an alarming shift in the gender mix. The percentage drop is positively correlated to higher levels of management. From an organizational view, the percentage of women in senior management positions pales in comparison to entry level positions.
When senior-level jobs become available, which is relatively rare to begin with, hiring managers are left with internal candidates that are most likely male by default. This creates a flawed talent model that does not generate progress in creating a gender diverse management team.
Clearly we cannot accept the status quo, so how do we break this cycle?
One approach, panelists agreed, would be a radical overhaul of the talent pipeline itself by going back to basics. This refers to shaping corporate culture and the internal processes that result in people being identified, nurtured and promoted up the executive chain, but what would this enlightened process look like?
According to panelists, it would look something like this:
An environment that openly welcomes and encourages women and men equally by frequently communicating and reinforcing this message from entry level all the way up to the CEO's office. Gender parity is the ultimate goal, yes, but we are not just talking about surface matters like child care and maternity leave policies. We are talking about building a corporate environment that is conducive to the equal contribution and success of both women and men within the business framework of that particular organization.
The defining characteristic and thread of this program, if you will, is purpose. The point isn't to nurture and celebrate women by the exclusion of men; it is to boost the energy, output and overall performance of the organization. Gender parity, in this context, isn't just a set of company policies, it's a serious business vehicle for getting things done and winning in the marketplace.
A talent pipeline re-engineered with these goals in mind would do the following:
- Be ongoing - A talent development program can't last for just six months or a year; it needs to be a permanent, ongoing effort.
- Have active management - It must have the full support and attention of senior leadership, including the CEO and board.
- Provide women with sponsors, not just mentors - Mentoring is important for people at all stages of their careers, but as executives advance, a sponsor can be incredibly instrumental when it comes to navigating the corporate landscape.
- Incentivize sponsorships - Linking compensation, bonus structures and performance reviews of sponsors so they remain committed and focused.
As noted above, an attractive employment package is the baseline for any progressive employer these days. Flexible work hours, free or low-fee daycare facilities, good maternity benefits and other forms of support for women and their families are a part of that. As mentioned earlier, these benefits only scratch the surface and should not be viewed or used as the sole source of hiring or retaining women.
The Middle East, specifically, must focus on the development of an ethos and mindset that truly embraces the notion of women at the most senior levels. This is a generation-old issue, and like gender parity, it is influenced by a host of factors. These include but are not limited to: the role of women in our society, family dynamics, personal choices, education, geography, and socio-economic influences. Like so many things in life, I believe that progress will be achieved with time. Still, many actions can be taken to accelerate this progress and promote progressive thinking in organizations.
Elevating women into senior roles isn't just the right thing to do. It is also proven to be good for business.
Studies have long suggested that having women in senior-level roles leads to better financial performance overall. A 2014 report by Credit Suisse, the German financial services giant, tracked the gender mix of 28,000 executives in 40 countries. The report's conclusion: companies with more female executives delivered superior return on equity (27 percent higher, overall) and a 42 percent higher ratio of dividend payouts. These companies also had better stock performance and higher valuations.
All of this goes back to another fundamental belief of mine: people should be accorded all career-related advancements on the basis of merit as opposed to who they know, their length of service in the company, the family name they bear or their gender. I believe that meritocracy in an organization brings out the best in all employees, and notably for this discussion, women. It is incumbent for senior managers to do everything within their power to ensure their team members prosper. On that point alone, gender balance at the top isn't just a vote for the power and value of women - it's a matter of corporate fiduciary responsibility.
Still, we have a long way to go in this effort as a global community. Indeed, only 18 percent of this year's attendees at Davos were women, versus 17 percent in 2015. A lot of this is due to the makeup of business and political organizations, which are still dominated by men. Nevertheless, the female attendees were more than impressive. Among these accomplished women were General Motors CEO Mary Barra, Managing Director of the International Monetary Fund Christine Lagarde, and Facebook Chief Operating Officer Sheryl Sandberg. UK Development Secretary Justine Greening also attended and participated in an open panel discussion on gender parity. "No country can truly develop if half its population is left behind," she told the crowd.
Powerful words, to say the least. I could not agree more.