“Diversity in all forms creates a broader basis for both understanding and decision-making,” – Misty Frost, the CEO of Carrus.
Women make up half of the world’s population but have been consistently underrepresented in the workplace and especially so in financial services and the City. However, it is being shown repeatedly across the world that having more diverse boards and companies leads to better decision making and positive outcomes.
A 2015 report from the McKinsey Global Institute backs up the correlation between workforce gender diversity and positive outcomes such as increased revenue and profits. It shows that when women are participating in the economy at the same level as men as much as £20 trillion – or 26% – would be added to the annual global GDP. This is due to the increase in diverse ideas and boost in productivity because of the different mindsets and styles of work that diversity can add to a workplace.
There are also benefits of having a diverse boardroom as if everyone has similar life experiences and backgrounds then there is unlikely to be an efficient discussion about ideas and decisions. Whereas, when there are people from all backgrounds, genders and beliefs then the discussion will allow for more diversity of thought which in turn gives the firm more value and an increased bottom line.
There are also more and more women running companies and leading departments and if an advisory team/firm does not include women then it will likely be more difficult to obtain contracts and form a relationship with the company. Also, many government contracts insist upon diversity from firms.
CEOs that agreed they have reaped these benefits from their strategies to promote inclusivity and diversity:
- 75% Serve new and evolving customer needs.
- 77% Enhance customer satisfaction.
- 83% Strengthen their brand and reputation.
- 85% Enhance business performance.
- 90% Attract talent.
Deloitte are one of the firms taking strides in increasing diversity across the City with their new “school and university-blind interviewing” to help increase social mobility, as they will judge applicants based on their successes, qualifications and references above the advantages they gained in childhood due to their family’s socio-economic position. Although progress on improving gender diversity in the boardroom across the world is slow, it is happening: the percentage of women filling board seats increased by 5% from 2015 to 2019 which is going in the right direction.
Author: Pippa Seager