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Happy International Women’s Day

7 March 2022
Parikshit Singh

Diversity reporting has become an integral part of the corporate governance framework for public companies.

The rise of ESG has given prominence to the importance of diversity, and strong causal evidence also shows that more women in leadership roles leads to better company performance, greater productivity, and greater profitability.

It found that for every 10,000 businesses, firms with single gender directors were 37% more likely to fail than those with gender diversity.

This study is one of many to highlight the positive effect diversity has on company performance.

What can companies take away from these findings?

Given the considerable benefits of leadership diversity, reflecting progress in their public disclosures is becoming essential for companies wanting to appeal to ESG-focused investors. Here are three considerations:

1. Putting diversity on the agenda

Firstly, diversity needs to be a genuine business priority, with companies developing a clear strategy with measurable targets. They may also consider establishing a governance structure which outlines diversity responsibilities throughout the organisation, to establish greater transparency and accountability.

2. Track, share and leverage blended metrics

Establish a set of key metrics representative of your objectives and report on these consistently. This can include workforce representation by gender, race, age, and seniority. Retention and promotion data can also be important, as well as the growth of employee resource groups and results of employee engagement surveys.

3. Take investors on the journey with you

Importantly, it’s as much about the journey as what you’ve already done. So, if any metrics are not available during a reporting period and your intention is to introduce them, say so. But do make sure you report on them next

As we celebrate International Women’s Day it’s worth pausing to consider what more we can do to champion better female representation across our board rooms, not least because it makes good commercial sense.

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