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Facts and Figures

WHAT IS THE CORPORATE GENDER GAP?

Despite companies’ aspirations for gender equality in the workplace there continues to be a significant gap between commitment and results. This is referred to as the Corporate Gender Gap. Legislation and regulation is one approach to closing the gap, but we believe a market led solution is an opportunity for a company to get a competitive edge in the market place.

The Corporate Gender Gap can be seen in three main areas


Various studies highlight the extent of the gap:

  1. Only 4% of the Fortune 500 companies have a Female CEO (Source: ‘Catalyst’ 2013)
  2. At the global level, women earn between 70% and 90 % of what men earn
    (Source: UN, The World’s Women 2010: Trends and Statistics, October 2010)
  3. The gender pay gap tends to widen with seniority, experience and age
    (Source: UN, The World’s Women 2010: Trends and Statistics, October 2010)
  4. Only 16% of the business critical jobs are held by women
    (Source: World Economic Forum, The Corporate Gender Gap Report, March 2010)
  5. Only 9% of directors on global corporate boards are women
    (Source: Pax World, Calvert and Walden Asset Management; Put Gender on the Agenda, October 2010)

 

CLOSING THE CORPORATE GENDER GAP MAKES BUSINESS SENSE- THE FACTS

As the competition for talent increases worldwide, it will become essential for corporations to effectively address the gender gap. Increasingly, for most CEOs—both male and female—managing gender parity is not a luxury; it is a necessity to ensure continued growth and success for these organizations in the global marketplace.

According to Bain & Company, companies that do make gender parity an integral part of their strategic goals report that the pay-off appears at multiple levels. By retaining women employees over the long term, companies create a deeper talent pool to dip into for developing leaders. In addition the companies realize significant cost savings by retraining and recruiting of new replacement talent. Large professional service firms have claimed to save tens of millions of dollars through effective gender parity initiatives that welcome women back into their organizations and put them on a serious promotion track.

Gender equality positively correlates with the financial performance of companies

A company’s gender mix positively relates to the company’s performance. Companies with the most female board members outperform those with the least on return on invested capital (ROIC) by 26%. The effect becomes even more important when comparing companies with three or more women on their board in at least four of five years. They significantly outperformed those with sustained low representation by 84% on return on sales (ROS), by 60% on return on invested capital (ROIC), and by 46% on return on equity (ROE).

Women bring in critical leadership skills and ensure diversity

According to McKinsey’s “Women Matter”, the 2008 edition, four behaviors are most effective for addressing future global challenges – intellectual stimulation, inspiration, participatory decision-making, and setting of expectations and rewards. All four traits were most commonly found among women leaders. Scott Page, professor of complex systems theory at the University of Michigan, demonstrated that groups with greater diversity tend to perform better than to homogeneous ones, even if the members of the homogeneous groups are more capable. In fact, the diversity of a group’s members matters as much as their ability and brainpower, if not more. His conclusion: “Diversity trumps ability”.

Workplace diversity better equips companies to address consumer market shifts

The importance of gender equality in the workplace is also inextricably linked to the growing role of women as consumers. With a total projected income of USD 18 trillion by 2014, women constitute the largest emerging consumer market and represent the driving force behind the vast majority of household purchases, even in industries with traditionally male buyers. They also have specific buying patterns and preferences.

As women tend to spend differently than men do, companies need to understand women’s preferences in order to capitalize on this growth. Having both women and men in decision-making roles gives organizations the insight they need to increase sales and fuel growth. A 2007 study demonstrated that businesses in the banking and finance sector saw an almost immediate increase in sales when taking into account the gender differences of their customers and tailoring their marketing specifically toward women. A Deloitte report noted that changing the gender balance of product development teams yielded important results in terms of business performance, as women now have a major influence on purchase decisions. In Europe, women are the driving force behind more than 70% of the household purchases, influence 60% of new car purchases in Japan and make up about 47% of the European computer users.

 

Reference sources:

1 Bain & Company, The great disappearing act: Gender parity up the corporate ladder, Davos 2010
2 Catalyst, The Bottom Line: Corporate Performance and Women’s representation on Boards (2004–2008) http://www.catalyst.org/, 2011
3 Scott Page, The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools and Societies, Princeton University Press, 2007.
4 M Solverstein, K. Sayre The Female Economy, HBR 2009.
5 Goldman Sachs Research Institute: The Power of the Purse: Global Equality in Middle Class Spending, 2009.
6 Cunningham, J., and P. Roberts Inside Her Pretty Little Head: A New Theory of Female Motivation and What It Means for Marketing, 2007
7 Deloitte, The Gender Dividend, 2011
8 McKinsey, Women Matter Report, 2007

So Why EDGE?

We are very proud to be the first company in Mexico certified on Workplace Gender Equality. This certification reflects Compartamos Banco’s commitment with gender equality and social inclusion. At the same time, this will provide us with a competitive edge in terms of talent management, making it easier for us to attract, develop, motivate and retain the best female and male talents in order to serve our more than 2.5 million clients, being 94% of them women dedicated to provide a better life quality for their families. This certification is a good sign that we’re on the right track with our believes in our companies in Mexico, Guatemala and Peru.
Carlos Labarthe, CEO of Gentera, the holding company owner of Compartamos Banco