[Column] Khethiwe Nkuna: Why investing in women is a smart economic policy
There is a growing body of evidence around the world that shows that gender diversity is linked to innovation in business. An innovation mindset is six times more likely in more gender-equal cultures than in the least equal ones.
If the innovation mindset in all countries were raised by 10%, we could expect an $8 trillion increase in global GDP by 2028. But the truth is that we still have a long way to go before we get there.
The gap between men and women is more expansive than ever. The COVID-19 pandemic shook the very foundations of humanity and left many women even more disadvantaged than before. For our businesses to thrive in this world of constant pandemics, we have no choice but to accelerate innovation – and investing in gender mainstreaming is one of the most effective ways to do this.
More women = more profit, even during Covid
Gender diversity has been shown to lead to higher levels of success over time for companies that make a strong and meaningful commitment to it. Data from Fortune 500 companies from 2001 to date show that those with female CEOs or boards with people of different genders do better as an organisation. Gender-diverse teams outperform male-dominated teams when it comes to sales and profits. In addition, companies in the Fortune 500 with a higher proportion of female directors perform better financially than those with a lower balance of female directors. The Pipeline, a diversity and inclusion advocacy group, published a report recently stating: "FTSE companies with no women at the board level are ten times less profitable than those whose executive boards have women holding one-third of positions."
If we look into the future, it's clear that these trends aren't going to change. Diverse organisations have a better bottom line. They are more productive, profitable and resilient because diversity brings new perspectives and means our businesses better represent the people we serve. They are better for employees, better for customers, better for communities and better for the economy.
According to Women Count 2021, companies with no women on their executive committees saw their profits plummet by 17.5%, while those with female representation ranging from 1-24% saw their earnings rise by 1.3%. According to the study, companies with 25-49% of their executive committee made 4.5% profit margins, while those with more than 50% earned 21.2% profit margins.
Achieving these results, especially in light of the pandemic's extreme circumstances, is an impressive accomplishment. Interesting questions about the change in results from previous years for companies with no women on the executive committee are needed.
Companies that have made strides in increasing the representation of women on their boards of directors have seen their profit margins decline steadily over time. As a result, in 2020, the company had a profit margin of just 1.5%, which was below the industry average.
Our continent can profit from investing in women
The challenge to achieve gender equality in South Africa and across the continent starts at fundamental levels with less access to education for women and repressive cultural norms. It also extends to the workplace, where unequal pay and privileges, as well as continued under-representation in senior positions, limit the progress of women and the achievement of gender equity.
The 2019 Global Gender Summit, hosted in Rwanda, highlighted the bleak statistics: "Women are responsible for 60% of work done globally yet earn just 10% income and 1% of the property. In Africa, 70% of women are excluded financially.
The continent has a US$42 billion financing gap between men and women." The overall gender gap in Sub-Saharan Africa is 32.7%, as only 67.2% of the gap has been closed.
The Global Gender Gap Report 2021 by WEF states that of the 35 countries in this region, only Namibia and Rwanda have completed at least 80% of their gaps. Eleven countries have closed between 70 and 78% of their gaps, another 19 countries between 60 and 69% and three countries (Mali, Chad and Congo, Dem Rep.) have closed less than 60% of their gap (59.1% for Mali and Chad and 57.6% for the Democratic Republic of Congo). Africa's corporate sector lags even more, even though women's equality could add 10% to GDP for Africa's economy, or US$316 billion by 2025.
We recognise the business value that gender mainstreaming brings, and Accenture is committed to accelerating equality in the workplace as responsible business leaders and driving our innovation agenda. Several years ago, we set two clear goals: to achieve a gender-balanced workforce by 2025 – and we are well on our way to achieving this.
Today, our workforce is 51% women, and the percentage of women managing directors is over 26%. Treating our gender goals like any other business priority, we hold leaders accountable, collect data, measure progress and publish workforce demographics across critical geographies. To build a sustainable economy, we believe that the private sector must work together with the government to maximise the potential of the country's people and enterprises.
Our goal is to add value to the South African vision by improving how the nation works and people live. We see transformation as critical to making this prosperous vision a reality.