By Katie M. Scholz | 11 October 2012
(Thomson Reuters) While more and more companies file Corporate Social Responsibility (CSR) reports each year, the lack of transparency into workplace gender equality remains troubling. Today, women outperform men academically and increasingly enter the workforce, but do not reach corresponding leadership positions. Many governments have stepped in to shatter the glass ceiling through regulation: Norway requires 40% of directors be female; France has a 20% female requirement for public boards in 2014, increasing to 40% by 2017; while in the U.S., public companies must disclose whether and how their nomination committees considers diversity in selecting directors.
Why are governments regulating gender equality in corporate governance? The justification for legislating equality has evolved beyond morality and human rights concerns into a focus on financial security. In the wake of the 2008 financial crisis, better board governance is a key to both fiscal and national security. The presence of qualified and experienced women in corporate governance results in better board practices from increased shareholder accountability to better legal compliance and even stronger financial performance. Closing the gender gap in management and governance positions actually correlates to stronger productivity on both corporate and national levels. However, despite the mounting data proving the benefits of ”a woman’s touch” in corporate governance, almost 85% of Fortune 500 company board positions still belong to men.
The importance of women to corporate governance is not limited to the boardroom. Women control almost 70% of global consumer spending and can actually drive the market for more eco-friendly products resulting in increasingly sustainable production methods by many companies. In addition, women play an important role in the global supply chain. Women are over-represented in precarious, low-waged or informal economic sectors, making it crucial for companies to examine their supply chain for inequality issues as companies have the choice to profit from or address gender inequality in their supply chains.
CSR reporting recognizes companies with initiatives and efforts that go beyond legal requirements. Including gender in CSR reports allows tracking of gender equality progress by company, industry and nation. However, an important hurdle to analyzing gender equality in the corporate world is the lack of consistent definitions and the lack of companies including gender in their reports. Even though the Global Reporting Institute included gender-related indicators in its G3 guidelines, many companies do not include gender data and, of the firms that do include gender, often only basic information is released, leaving unreported initiatives in career development, equal pay and employment. The G3 guidelines contain performance indicators to track changes and trends to monitor the progress of gender equality and development. GRI also provides guidelines for companies to start tracking and reporting their gender-related initiatives.
It is time to go further than merely recognizing the value women provide in corporate governance, it’s time to take down the glass ceiling, close the gender gap and realize the benefits of gender equality to the private and public sectors.