Women play a crucial role in stimulating economic growth

Companies need to invest more in women to improve business, increase sales, reduce costs and expand markets. Deloitte Belgium looks very carefully at an equal division between men and women in its workforce.
7 Mar 2011

Brussels, 7 March 2011 — The ongoing disparity between the relative proportion of female and male board members remains a rising concern in corporate boardrooms. Within the framework of tomorrow's International Women's day, Deloitte presents its report: "Women in the boardroom: A global perspective", which examined the legislative efforts across 121 countries, compared the current percentage of women on boards around the world, and points out that Belgium is not scoring very well. Moreover, the new Deloitte report "The Gender Dividend: Making the Business Case for Investing in Women", the first in a series, lays out the rationale behind why governments and organizations must look to women as key to their economic growth. Deloitte Belgium has very well understood that economic growth and competitive advantage in 2011 hinge on capturing women's insights in the workplace and embracing their role as powerful consumers.

Women in the Boardroom: Legislative efforts in Belgium

Research1 has shown that the average percentage of women serving in boards of a sample of 26 listed companies for Belgium only amounts to 6,8%. 30% of the Bel20 companies do not have women in their boards. Compared to the other countries in the research, Belgium still scores quite low in the ranking of companies with at least one female director in the boardroom: the three countries with the highest percentage of companies that had at least one female director were Finland (96.3%), Sweden (93.9%) and Norway (91.3%). With only 46.15%, Belgium is one of the worst performers from Western Europe. Only Italy (35.71%) and Portugal (27.27%) obtained a lower score. The worst performers were Japan (9.4%), South Korea (13.6%) and Malaysia (14.8%).

A lot of countries around the world are currently considering voluntary policies or even legal requirements to improve the gender balance in the Company Boards. Most of the efforts so far have been on voluntary policies, often included in national Corporate Governance Codes. In January 2011, the Belgian Commission Corporate Governance presented its recommendation that in a period of seven years, the boards of Belgian listed companies should evolve towards a representation of minimum 30% of board members of every sex. 5 political parties (Groen!, SP.A, PS, CD&V and CdH) have introduced legislative proposals wanting to impose legal quota for different types of Belgian companies. This will have to lead towards the development of one proposal, which will have to be approved by a majority in the Chamber. On Tuesday 1 March 2011, the Commission of the Chamber of Commerce approved a legislative proposal that would impose a quota for women in the boardrooms of government and listed companies. According to the proposal, at least 30% of these organizations' board members must be women. The proposal now needs to pass the plenary session. N-VA has already announced its opposition to the text, together with Open VLD.

"It's clear that there's a need for more gender diversity on Boards and in management. The question is how to arrive there and what would be a reasonable timeframe." says Hilde Laga, Partner at Laga. "Legal rules provide a standard response for a company, but there may be circumstances where quotas do not (yet) work out. Endorsed quotas may limit a company's ability to search and select the best candidates. A Code of Conduct on the other hand, can include a company's own objectives with regards to women on Boards and in management, which gives companies a framework to operate in. Research clearly indicates that gender diversity is a key matter for economic growth, so the overall consensus is that progress needs to be made."

The Gender Dividend: Why women play a crucial role in stimulating economic growth

Although governments around the world debate the best policies, regulations, and practices to spur economic growth in 2011 and beyond, they would benefit from looking less at regions and industries and more at demographic information and the vital role women play in driving economic growth. Marie-Noëlle Godeau, Partner at Deloitte, confirms: "we see that several governments are requiring that women make up a critical mass of the boards of publicly traded companies. But these laws have not ensured that women are fully integrated as economic actors. Women represent a significant percentage of the workforce —and graduates—and yet have not reached a proportional role in decision-making in some key industries".

According to the Deloitte report "The Gender Dividend: Making the Business Case for Investing in Women", investing in women can yield a significant return, the Gender Dividend, which could improve business, increase sales, reduce costs and expand markets. Marie-Noëlle Godeau: "Reaping the Gender Dividend will require going well beyond eliminating the explicit discrimination that laws and policies have taken aim at over the past decades. It will require a concerted, strategic focus on how to fully integrate women's experiences, perspectives, and voices into the fabric of an organization".

With an aging population and a shortage of skilled workers looming, economies must draw on all resources of talent. And with women making up nearly half the working population in many regions around the world, policies and investments targeted at promoting women will be critical in a global economy which is becoming increasingly dependent on the intangible assets of people, brand, and intellectual property. Furthermore, companies need to understand women's preferences and how to market to them as consumers. According to the report, 80 percent of women feel that investment marketers don't understand their needs, with 50 percent feeling the same about the marketers of healthcare and food products. Given the power of the female consumer, these levels of unease can decrease competitiveness.

The report shows that, when implemented correctly, the gender dividend can be reflected in increased sales, expanded markets, and improved recruitment and retention of key talent. To achieve the dividend, organizations need to focus on the collective perspectives of both men and women, which can lead to better decisions and more effective leadership.

Diversity at Deloitte Belgium

As a firm, Deloitte recognises the strength that comes from the diversity of individuals, talents and expertise. A culture of inclusion enables all the Deloitte employees to achieve their full potential, and it transforms diverse perspectives into value for all the Deloitte stakeholders. The Deloitte diversity efforts are organised under the umbrella of the "Diversity and Inclusion" initiative. A key priority is ensuring gender diversity at all levels.

Rik Vanpeteghem, CEO Deloitte Belgium explains: "At the end of FY10, women made up 46% of Deloitte's workforce, up from 44% in FY09. Our intake of graduates is fairly evenly divided between males and females. And we work actively to increase female representation at the higher levels of our firm, especially partners and directors."

It is Deloitte's ambition to become the No. 1 destination for top talent. Key to achieving this goal is building a true coaching organisation, for women and men. Rik Vanpeteghem: "To understand why it is so critical that women play a key role in building—and rebuilding—economies around the world, it's important to consider the rise of talent as a dominant business issue. In the digital, knowledge economy, human capital replaces natural resources as the basis for growth. The businesses and countries that will lead in this century will be the ones that are best able to harness the innovation and creativity of their people. Women are undoubtedly a growing force in the talent pool. But the real power comes from women and men working together and using their experience to solve complex problems and accelerate innovation".