Why should CEOs care about women empowerment?

Mention the phrase ‘women empowerment’ to many of India’s corporate leaders and you will usually hear the usual platitudes about how it is important for the country and ‘we’ should do more about it. However, when you ask them how many women they have in their CXO team or on their board, you will often get a sheepish answer. They may mumble a little that they do their bit for women empowerment through their mandated CSR activities, but that’s all. These CEOs are making a mistake by ignoring the capabilities of the women in their workforce and the reasons for this are not just altruistic in nature.

A recent poll by Gallup discovered that female managers in a company are much more likely to motivate and engage their juniors than male managers. If you consider that almost 70% of a company’s success is based on how engaged their employees are according to the same Gallup poll, this is not something that should be ignored. Two major reasons for increased employee engagement are that female managers are more likely to show interest in an employee’s personal development and are more willing to delegate responsibility.  They also have fewer ego clashes with other departments and are willing to work towards harmonious solutions. Women bring a holistic approach, are more nurturing and are willing to share power and information. These traits stand to benefit women because the world has transitioned from an industrial age into an information age during this century. The information age calls for structures and cultures in organizations that promote the spread of knowledge and is more accommodating of diversity of thought and people, than the industrial age which was more focused on capital and labour.

This also translates into the bottom line. A study by Credit Suisse shows that the stocks of global companies who have women on their board make 4% higher returns on average compared to companies with male only boards. This difference is not just in large corporations, the well-known Venture Capital investor, Kevin O’Leary has said; “I prefer investing in female entrepreneurs. They take less risk & are more goal-oriented in terms of setting and meeting targets. I just make more money with women, period.” Although young male tech entrepreneurs get the majority of media attention, there are ever larger numbers of women who are taking the plunge into starting their own business.

Going beyond corporate India, empowering women will make a huge impact on the growth of our economy. The IMF says that countries that promote women employment can add 15% to 35% growth in their GDP. With working women only comprising of 22% of India’s workforce, we could easily add Rs. 1.74 Lakh Crore to our GDP by matching the male-female working population ratios in developed countries. This is not something that our political leaders should take lightly.

It’s quite clear there is a huge economic benefit to greater empowerment of women in the workforce. However, most of us are also clear that there are many barriers that also exist primarily due to the patriarchal mindset we have in our country that contributes to the corporate ‘glass ceiling’.

Corporate women are often denied the opportunity to work in line functions like product sales or operations and often get placed in staff roles like human resources or corporate communications. The assumption being that they are not able to handle the long work hours or stress of these line functions. However, experience in line or operational functions, during one’s mid-career is often an unwritten prerequisite to getting into the C-suite.

Another issue is that many women have to leave a promising career midway to start a family and stay at home to raise their children. Those who choose to stay on at work while having growing children at home also face the unwillingness of their bosses to promote them to key positions as they have the concern that they may not have as many hours a day to devote to the job due to family responsibilities.

The situation is not hopeless. There are some things that forward thinking companies and families can do to ensure that women get an equal chance of moving up the corporate ladder.

Companies can implement career planning, mentoring and leadership development programs for women. They can also identify high-potential women early on in their careers, involve them in decision-making and provide them with opportunities to lead high profile projects so that they build their competencies and skill-sets to ascend to the upper levels of the company. Overall, they can create a climate in the company that is more inclusive and holistic, and more conducive to the management styles of women. They can also make accommodations to women to enable them to strike the right work-family balance and set up crèches within the office. A culture where senior women managers take responsibility to mentor junior female employees will also help.

At home, the idea of shared parenting is taking hold in certain families. In this, the mother and father both take equal responsibility for raising the children and ensuring that household work is done. Each parent respects the importance of the other’s career. Eg. If a child needs to be picked up early from school, the parent who is least busy can take a half-day from office to do so. Many successful women corporate leaders like Chanda Kochhar (MD, ICICI Bank) & Vinita Bali (MD Britannia Industries) have spoken about how their husbands support in sharing family duties was a key contributor to their career success. Additionally, studies show that children who have more involved fathers tend to have lower stress levels, greater intelligence & success in life.

Certain companies in the publishing, education, entertainment, healthcare and banking industries have started implementing women friendly policies. However, there is still a long way to go. The bottom line is that making cultural changes in the workplace or at home will not be easy. Still, any CEO who encourages women to be fully empowered in their companies, will reap financial benefits way beyond their expectations.