Driving corporate sustainability through enhancing gender diversity

Facing the increasing competition and the challenges brought by the ever-changing market, how an organization manages its human resources is one of the most important factors to determine whether it can sustain its development. In order to attract suitable and talented people and retain the employees, more and more organizations implement diversity initiatives. Diversity could extend to race, ethnic background, sexual orientation and gender, and among these aspects, the gender gap is often taken as the largest issue that needs to be addressed at all levels of an organization.

According to the Global Gender Gap Report 2018 published by Global Economic Forum, the global gender gap in 2018 has declined by 3.6% since 2006. Despite the fact that there’s a declination of gender gap, women are still underrepresented at all levels especially in senior management and the board. According to a research conducted by 30% Club, the United States, 23.6% of the board members are women; the percentage of the women board member in Australia and the United Kingdom are 29.5% and 29.6% respectively. In Asian countries, women only take up 7.6% of the board in Japan, 13% in Hong Kong, and 23% in Malaysia. It is time for organizations to consider enhancing gender diversity with a view to achieving a more sustainable human resources management.

Broader gender inclusion generates higher financial returns and facilitates business operations

It is believed that a gender-diverse workforce offers organizations with a competitive advantage that would result in higher performance. According to McKinsey’s diversity data in 2014, companies in the top gender diversity quartile are 15% more likely to have higher financial returns than their medians in the same national industry. The statistic has reached 21% three years later in 2017.

Gender-focused human resource management could potentially widen organizations’ talent pools which facilitate the gathering of various opinions and stimulate more creative and innovative ways to conduct business. In addition, a diverse workforce helps organizations to better understand customers from different backgrounds, resulting in more effective communication and product delivery. Finally, gender diversity indicates the inclusive culture of an organization that reinforces a favorable corporate image.

How to shape a gender-diverse and inclusive corporate culture?

Even though plenty of organizations realized the importance of increasing gender diversity, the proportion of women at every level in corporations hasn’t changed much. This implies that corporates need to review and assess their management approach on gender diversity and allocate more resources on improving the relevant performance.

The first step striding towards a balanced workforce is to promote board gender balance. This allows the senior leaders to set themselves as role models for employees at all levels. It also avoids the underrepresentation of certain genders and encourages better governance when it comes to gender issues.

In addition, organizations could create a gender-diverse workplace by offering relevant trainings, such as sexual harassment and anti-bias training. For example, to tackle unconscious bias, many organizations, such as Swire Pacific, Google, and the Federal Aviation Administration have conducted unconscious bias training programs. The program serves the purpose of raising staff’s awareness on unconscious bias and promoting diverse company culture. The training also equips hiring managers with knowledge and skills in evaluating job candidates to guarantee a more equitable hiring process. To ensure the effectiveness of the program, organizations could make the training a long-term and regular program with instant feedback channels for the reporting of any biasing behaviors.

Finally, recording and disclosing the performance of gender diversity at governance and workforce level enables organizations to analyze their performance, assess and enhance the practices accordingly, and set up long-term targets to strengthen the diverse and inclusive culture.

On its journey of creating a gender balanced workforce, Allied Sustainability and Environmental Consultants Group Limited (“AEC Group”), the first listed sustainability and environmental consultancy in Hong Kong, has been taking the above-mentioned approaches to promote such culture. It has achieved over 33% of women representation on board, which is much higher than the average of 13% in Hong Kong. It has also been implementing a gender-focused human resource management approach over the past several years. For instance, AEC Group allows female employees to extend their maternity leaves and male employees to take paternity leave to take care of the newborn babies. Senior leaders and board members also host tea gatherings regularly with all female employees to listen to their perspectives on the company and the working environment, in hopes of encouraging them to raise up their voices more often. As a result, AEC Group has maintained a balanced workforce with 53% of female employees and 47% of male employees for three years. The gender-balanced workforce has facilitated AEC Group to have better collaboration and communication with internal employees, external clients and other stakeholders, which laid the foundation of its sustainable development.

Gender diversity is becoming increasingly important in the capital market

As an increasing number of researches have proven that organizations can benefit from gender balanced workforces, investors start to pay more attention to observing organizations’ performance on gender diversity. Investors’ demand has changed the requirements of stock exchange markets and the behaviors of organizations: some European countries required organizations to include a certain percentage of women in their boards. In Asia, Hong Kong Exchanges and Clearing Limited (“HKEX”) has revised its guidance for new applicants, requiring them to disclose the policies on board diversity. To promote gender balance on board, in 2010, a campaign called 30% Club was launched in the United Kingdom. Since then, it has expanded to fourteen other countries and regions such as Turkey, Brazil, Australia, the United States, Japan, Malaysia, and Hong Kong. These initiatives have implicated that gender diversity is becoming increasingly important in the capital market. In this regard, organizations could use this opportunity to review their performances, management approaches and policies on gender diversity and promote good human resource governance in order to enhance corporate sustainability.

This article was written by Shayne Jiang, Consultant at Allied Environmental Consultants Limited.