Recently, I led two panels at a symposium in Chicago on gender equality on boards and in the C-suite. The event approached the problem and solution through the lens of the investor and social impact organizations – and our power to compel change.
There was an impressive list of delegates and topics, and I’m excited to share the call to action with you. I ask you to reflect on the slow progress we’ve seen and to consider stepping up your commitment in these three critical areas: transparency and access to information, investment and mission alignment and bias interruption.
Transparency and access to information
Janet Cowell, Treasurer of North Carolina, oversees more than 90 billion dollars in pension investments for public employees in her state. She spoke with us about her action earlier this year to join eight other public fund fiduciaries to petition the SEC for rulemaking on gender disclosure. The petition seeks public companies to disclose a matrix or chart, in a searchable electronic format, containing the qualities, skills, gender, race and ethnicity of board nominees. The current rule requires skills, but no disclosure on gender or ethnicity.
Transparency and access to information are powerful tools for results. Any business leader knows that what doesn’t get measured doesn’t get done. Data is essential for progress. SEC disclosures shine light on information we need to know to make better investment decisions and they help us gather the facts we need to influence positive social impact- like the vision of realizing 50% women in leadership positions across America.
Investment and mission alignment
Several panelists, including the Ms. Foundation for Women, the City of Chicago and the UAW Retiree Medical Benefits Trust, talked about their intent to align their investment decisions with their organizations’ missions. The mission of the Ms. Foundation for Women is to build women’s collective power to realize a nation of justice for all. Teresa Younger, its CEO, talked about how she is using a gender and equality lens in everything they do including how they invest their foundation’s assets.
Several fund management companies stressed the need to hold company boards accountable for progress. While the consensus is that quotas aren’t the answer, targets, directionality and accountability are necessary. Investors must engage CEOs and have uncomfortable conversations– why aren’t there more women on the team? Why isn’t there more ethnicity? What are your targets and what is your timing?
On October 22, The U.S. Labor Department issued new guidance about the investment duties of plan fiduciaries under the Employee Retirement Income Security Act (ERISA) when considering economically targeted investments (ETIs) and investment strategies that take into account environmental, social and governance (ESG) factors. In the press release, U.S. Secretary of Labor Thomas E. Perez said, "Investing in the best interests of a retirement plan and in the growth of a community can go hand in hand."
This new guidance is encouraging and constructive in leveraging investor power.
Women continue to be underrepresented on boards, in the c-suite and throughout leadership positions in companies. Catalyst, the leading nonprofit organization with a mission to expand opportunities for women and business, and State Street Center for Applied Research, an independent think tank that conducts targeted research on issues that will shape the future of the investment industry, shared insights and recommendations on actions to help move the stubborn statistics. In research published this year, Addressing Gender Folklore, State Street recommends a four-step action plan to neutralize gender bias: identify the bias, develop measures, implement interrupters and re-measure.
Four patterns of bias are occurring according to State Street:
Prove-it-again is the tendency to have more requirements for women than for men.
Tightrope is the notion that success tends to be characterized by masculine qualities, yet women are expected to display traditionally feminine qualities (Catalyst calls this the double-bind).
Maternal wall is the bias against working mothers.
Tug-of-war is when gender bias against women fuels conflict among women, as they distance themselves from other women in response to the prevailing bias.
The solution requires interrupting the biases- changing business processes. For example, post all jobs so you attract a more diverse pool of qualified candidates from which to choose, require that selection criteria are clearly defined before an interview happens, require interviewers to explain specifically why one candidate was preferred over another—scrutinizing decisions creates checks and balances to correct errors in judgment that occur from unconscious biases.
Actions speak louder than words – but loud words help
As you begin to think about your goals for 2016, I want you to consider stepping up your commitment to gender diversity. At the symposium, Jim Powers, CEO of Crowe Horwath, inspired us to act. Jim says we must turn passive support into action. He challenged us, “What are you doing to actively promote gender diversity in leadership? It’s not good enough to be a supporter, you have to be an active supporter – a doer. You have to make it happen at the grassroots.”
There is power in numbers. We must find the courage to speak up – loudly. Fund managers, SRI professionals, employees, consumers – start the conversation - ask the question that needs to be answered – why don’t you have more women in leadership positions?