Companies say they are committed to diversity and inclusion.

Here’s how they can turn talk into action.

The business case for gender parity has been well established. Five years ago, for example, the McKinsey Global Institute found that workplace gender equality could add US$ 28 trillion to the global economy by 2025.

And yet companies are still struggling to bring about change. “Women are starkly under-represented in corporate boards and leadership positions in general,” Melsa Ararat, a professor of corporate governance at Sabanci University told a panel of participants at the UN Global Compact Leaders Summit in June. She was speaking about her native country Turkey, but she could have been referring to any country in the world.

It’s not that the desire is lacking. It’s been ten years since the UN Global Compact and UN Women established the Women’s Empowerment Principles — a set of guidelines for how business can empower women at work — and it is encouraging that 3,000 CEOs have since signed a statement of support. But it needs to be about more than just making a commitment. “We have to move from principles to action,” Lauren Gula of the UN Global Compact said at the Summit.

For companies ready to go from talking the talk to walking the walk, Irene Natividad, Chair of Corporate Women Directors International, Chair of Corporate Women Directors International, had four pieces of advice she shared with summit participants.

1. Set targets

“What gets measured, gets done,” Natividad said. So if companies want to get serious about having more representative leadership, they need to put in place clear, measurable and timely targets.

“Companies set targets for finance, for recruiting, for all kinds of things,” Natividad pointed out. “So they can set targets for women on boards and senior management. Set goals, then set timelines for meeting those goals.”

Recognizing that great diversity and inclusion in leadership is “simply better for institutions,” Nahla Vahlja, Senior Gender Adviser to the UN Secretary-General Antonio Guterres, explained that on coming to office at the beginning of 2017 Guterres made a commitment to achieve gender parity in the United Nations, at the most senior level by the end of 2021 and across all levels of the UN by 2028. In fact, the first target of gender parity at a senior level was met on 1 January 2020, and the achievement of this public target has had a transformative impact on the organization as a whole and created momentum for achieving future goals.

2. Put in place formal processes

Setting goals is one thing, but how do you ensure you meet them? It starts by formalizing processes that might otherwise end up being biased. “Only one-third of board searches are done through executive search firms; the rest are done informally,” Natividad told Summit participants.

The result is that people draw on their same old networks, at the expense of less well-connected but equally qualified candidates. That then leads to a lack of diversity on boards. In 2019, only 27 per cent of S&P 500 board seats were held by women. It’s an improvement — just a few years earlier, that figure had been stuck at 16 per cent for a while — but it’s still far from parity.

“Having a formal nomination committee takes board selection out of personal choices to a more process-driven environment,” Natividad argued.

3. Make targets public

Once you’ve set targets and started putting in place the formal processes to make them happen, communicate them to the world.

“Within the committee, there should be a statement that diversity is a goal,” Natividad said. “That could be a commitment to having female candidates and people of colour in every slate presented to the board.”

Such a public commitment holds companies accountable and ensures everyone they work with is on the same page. “If the committee hires a search firm, they will know that only a diverse slate of candidates will be accepted,” Natividad added.

Recognizing the importance of public targets, Antonio Huertas, CEO and Chairman of Mapfre Global Insurance Group, shared that the Group has made a commitment to stakeholders every year at their AGM since 2016, and has openly set a goal of filling 45 per cent of annual vacancies for positions of responsibilities by women by 2021.

4. Rethink the way things have always been done

They say that the definition of insanity is doing the same thing over and over again, but expecting different results. If companies want to accelerate the glacial pace of change when it comes to gender parity, it’s time to start doing things differently, Natividad argued.

That could be as simple as revisiting old rules around the number of people that make up a company’s board. “Boards should be flexible,” Natividad said. “If you don’t want to ask somebody to step down, expand the board — add one or two seats. It’s not going to kill you and it may create more diversity.”

It could also involve completely rethinking what it means to be a leader. “You have to expand your definition of what it takes to be a board member,” Natividad told Summit participants. If the only people you’ll consider recruiting are former or existing CEOs, don’t be surprised when you have no diversity on your board. “We all know the numbers — there are very few women CEOs.”

Instead, cast a wider net and look for atypical profiles, Natividad advised. “There are women who run multimillion dollar businesses that they created. They’re not asked to sit on boards.”

Turning words into action

These four action items might be simple, but they take effort and commitment, Natividad warned. “Diversity and inclusion isn’t something that just happens because it’s in your mission statement. It takes hard work.” But companies willing to put in that hard work will reap the benefits.

The UN Global Compact has launched Target Gender Equality to support companies in setting and meeting ambitious targets for women's representation and leadership in business. Find out more here.