Women are the majority - Building Gender Balanced Business

The question is being asked. Would the financial mess we are in today have happened if more women had been at the top of our banks and financial institutions? One article worth looking at in The Times suggests that the testosterone-fuelled risk-taking culture in the City contributed significantly to the present crisis and that there are basic biological and psychological differences that pre-dispose men to taking greater risk.

In conversations with senior women figures in investment banking, the answer is usually, yes. One female banker commented that there is no way that women would have accepted financial products of such complexity. If it could not easily be explained they would not have liked it, much as Warren Buffet did not. This issue is reminiscent of previous financial crises. Enron, once regarded as the new economy’s rising star, was notoriously obtuse. Few people really understood its business.

Before that the bosses at Barings Bank did not understand their new market in Singapore that a certain Nick Leeson had started to develop for them. In his own account of the disastrous fall of Barings brought about by his dealings, Rogue Trader Leeson wrote of the time he visited the London HQ and talked to the top team. They could not have been more different. The heads of Barings – upper middle class, male establishment figures – and Leeson, a working class lad from Watford.

By then, Leeson was consuming barrels of sweets to help him cope with the excessive stress of covering up the mounting losses. But the point is that his bosses did not mind that they did not understand the Singapore market. As long as Leeson seemed to be filling their coffers, he was patted on the head and told to go back. The rest is history. Would women have behaved differently? It cannot be known as in all ‘What if?’ scenarios. But there is a reasonable chance that having an alternative female perspective at the top of Barings or today in other banks, would have increased the probability that the excess might have been stopped before it was too late.

“Would the financial mess we are in today have happened if more women had been at the top of our banks and financial institutions?”

The key question for business heads now, though, is what next? At a conference aimed at women in the financial sector, organised by the Institute of Chartered Accountants in the UK, held on 29 September (the day that the $700 billion bill to bail out the affected banks in the US was voted down in the House of Representatives in the US), Avivah Wittenberg-Cox, co-author of Why Women Mean Business, said that there was “never a better time to be a woman”. The reality, she continued, is that women were now the majority in most places around the world in terms of educated talent and in terms of purchasing power.

Alison Maitland, co-author of Why Women Mean Business added some compelling statistics to back this up. Six million out of eight million new jobs in Europe had been filled by women, for example. Sixty percent of university graduates in Europe and the US are women (in Bahrain the figure is 95%) and 80% of purchasing decisions in big consumer products such as cars and computers are made by women in the US. Maitland added that there were now more women millionaires in the UK than men in the 18-44 age group.

This all means that countries can significantly boost their GDP if their businesses fully tap into the female talent pool and work out how to sell to women more effectively. And various studies had shown that there was likely to be a correlation between companies with more women leaders at the top and better financial performance. However, the data continued to show that most companies in most countries were not moving fast enough on this issue. They were not tapping into the female talent pool quickly enough and in particular, they were not ensuring that they rose into the higher ranks. And they were not thinking deeply enough about how to market to women.

This point was hammered home by Collette Dunkley, CEO of X&Y Communications, which specialises in helping companies market to women. “You can’t just paint a phone pink and think that’s it,” she said. Women were, for example, more influenced by word of mouth recommendations than men and therefore companies needed to ensure that their brands appealed to women at all touch-points. In one case, she said, a company managed to increase its sales conversion by 46% after a course on the subject of marketing to women. Marketing normally segments people into their life stage, generation and gender in that order, said Dunkley. This should be turned on its head, with the gender segmentation coming first. “In my shopping, I would have more in common with a 74 year old woman than a man of my generation,” she said.

“It’s time to flip the question – in the 21st century we should be asking, what is the matter with companies that cannot recruit, retain and promote the majority of talent or serve the majority of the market?”

“We are the talent and we are the market”, Wittenberg-Cox told the audience at the conference, consisting of around 95% women. The old notion that companies needed to find out how to help women do better should be thrown out, she added. “It’s time to flip the question – in the 21st century we should be asking, what is the matter with companies that cannot recruit, retain and promote the majority of talent or serve the majority of the market?”

This is the question that should be debated in the boardrooms in the UK, US and elsewhere. But it is unlikely. In present circumstances, business heads will put on their tin hats and try to weather the financial storm. Such times make most people cautious. But this is just the moment for some companies to pull ahead of their rivals by exploiting the gender card.

Plus, CEOs will continue to be prey to old prejudices and notions. At the conference, Giles Crewdson, a headhunter at Korn Ferry International made the point that most business leaders had a traditional view of potential candidates for the board. If it was a choice between someone who had worked flexibly, possibly with some home-working component, and someone who had a more conventional full day at the office, they would choose the latter. The flexible working candidate would not be seen as serious enough.

But this question should be flipped too: it is up to the CEO and Chairman to recruit the best talent to the board and bring diverse views there. If that is to be found in an unusual candidate, then isn’t up to them to open their minds and consider a new possibility. If some women prefer to work flexibly (as indeed many men would too), then the CEO is the one who needs to adapt. His or her job is to staff the board with the very best people. Old fashioned notions can be stubborn, sometimes they do help people make informed decisions. But if you take into account, the fact that women are half the talent and half the market, then many of the boards in western firms are likely to be under-performing. Doing something about this is not a nice diversity issue, it is perhaps a duty.