The economic case for gender equality in the workplace couldn't be stronger: An overwhelming body of evidence shows that when there is a better gender balance in the boardroom and more women in the workforce, companies perform better and economies grow faster.

The Organisation for Economic Co-operation and Development (OECD) says that an increase in female labor force participation results in faster economic growth, and calculations by McKinsey & Company published in 2016 suggest that if every country raised its game to match the improvement of the best-performing country in their region, it would add as much as US$12 trillion to annual global GDP by 2025. That is equivalent to the GDP of Japan, Germany and the UK combined. Better still, closing entirely the gender gap between men and women's participation in the labor markets could lead to a US$28 trillion—or 26 percent—boost to annual global GDP by 2025 compared to a continuation of the status quo. That is roughly the size of the US and Chinese economies combined.

Valuing diversity

At the company level, numerous studies have shown that gender balance in the boardroom means higher profits. A Credit Suisse analysis of 3,000 companies worldwide found that between 2012 and 2014 there was a 5 percent share price outperformance by companies with at least one woman on the board compared to those with none.

Yet progress is painfully slow. Indeed, the World Economic Forum's (WEF's) Global Gender Gap Report 2015predicts that at the current pace it will take until 2133 to achieve gender parity, as defined by economic participation and opportunity, access to education, political empowerment through representation in decision-making structures and health measured by life expectancy and gender ratio. When it comes to pay, women only now take home what men were earning ten years ago, while World Bank data show that women in most countries earn, on average, just 60 to 75 percent of men's wages.

Four Nordic nations dominate the list of the most gender-equal societies in the world. Iceland (1), Norway (2), Finland (3), Sweden (4) and Ireland (5) occupy the top five places in the WEF's rankings. The UK is at 18 and the US is at number 28. Stephen Ravenscroft, a partner in the employment practice in White & Case's London office, says: "Scandinavia has always had very forward-looking, family-friendly policies. Men are much more likely to take longer periods of parental leave and a greater share of childcare responsibilities than they are in other parts of Europe, certainly more than in the UK. When their families have children, women are given much more opportunity to work on a flexible basis."

In the UK, new legislation is coming into effect in October 2016 requiring companies employing 250 staff or more to publish an annual report of their gender pay gap data. However, companies will not actually have to publish the data until April 2018.

Ravenscroft warns that, while it is welcome news that companies will have to start focusing much more closely on their gender pay gap, the raw data may not show the full picture. He says: "Introducing this new law is not going to solve everything. In its current form, it's a fairly blunt tool. There's no requirement to compare full-time pay rates with part-time rates. There's no requirement to compare particular roles filled by men with the same type of roles filled by women." He adds: "Bizarrely, an employer that starts to offer more flexible working could initially see an adverse effect on its gender pay gap data if more of its female employees take up part-time opportunities than its male employees. So it really requires a deeper analysis of that data."

Fiona Hathorn, managing director of Women on Boards, an organization that helps women make the right career choices to reach the top of their own companies, believes the new law is a hugely positive step. "What gets measured gets managed and what gets managed gets done," she says. "When you start looking at your data, you start questioning your culture and whether you are or aren't being inclusive."

She argues that diversity makes companies smarter: "Smarter in terms of product innovation, efficient use of capital, understanding our customer needs—the bottom line is higher returns and higher profits, which therefore makes a better and more competitive company, which then makes our country more competitive in the global market."

Restoring the balance

In June 2016, the White House launched an Equal Pay Pledge for private sector companies to sign. At launch there were 28 signatories including Accenture, Airbnb, Amazon, American Airlines, Cisco, Deloitte, Expedia, Gap, PepsiCo and PwC. Meanwhile, Australia introduced reporting requirements for companies with 100-plus staff in 2013.

Several major UK banks including HSBC, Barclays, Royal Bank of Scotland and Lloyds Banking Group, along with the Lloyd's of London insurance market, have signed up to a new voluntary Treasury charter aimed at getting more women into senior roles in the finance industry. They have pledged to set internal targets for inclusion and to appoint an executive for gender and diversity.

Experts suggest a more balanced candidate pool at the recruitment stage would help companies support the future development of high-potential female employees.

Louisa Symington-Mills, the founder of Cityparents, a networking group for working parents in the City of London, says tackling recruitment bias is key to redressing the gender imbalance in the workplace. "This can include unconscious-bias training in recruitment, the use of gender-balanced interview panels, setting targets for gender diversity at all organizational levels and tasking search firms with the need to attract a more diverse applicant field, and thus provide gender balanced selection panels," she says. As employees continue up the career ladder, promotion processes must be transparent and monitored for gender inclusion, she adds. "One of the biggest challenges is to ensure that management and human resources policy filters down through an organization to ensure there is no disconnect between the corporate ideal and the reality of day-to-day working life."

The topic of quotas is also frequently mentioned as a possible means of restoring the balance. However, Henrik Patel, a partner in White & Case's New York office, says: "'Quota' is a dirty word in the US. It has become synonymous with tokenism and that is not where most companies want to be seen. A quota implies that if you have two candidates and one is clearly better, but the other happens to be a certain gender or ethnicity, that you have to pick them. But targets are different."

Hathorn agrees that it's crucial to prioritize targets over quotas. "A quota is a legislative tool which results in punitive action if you don't follow it," she says. "A target is just good business management. I always say to companies: 'If you have targets for sales, costs, investments and paper clip consumption, why wouldn't you have targets for talent management?'"

Gender equality is increasingly becoming a benchmark by which the performance of companies is judged, not just by potential employees, but also by investors and would-be business partners. Meeting equality targets sends a clear message to all stakeholders that a company is well-managed and in charge of its own future.

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