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by GK Strategy 8th March, 2018

Investing in Diversity – Essential for Business Growth

International Women’s Day is an opportunity to reflect not just on the value that women can bring to your organisation or team, but on the value of diversity in general.

Thinking around diversity has come a long way from the tick box exercises of old. Today diversity of thought is seen as central to good business practice and effective decision-making.

Gender diversity has become one of the prime factors for judging a company’s views and commitment to Environmental, Social and Governance (ESG) – key components of Socially Responsible Investing (SRI).

A number of studies have stated that focussing on a company’s ESG criteria has a direct correlation with bolstering returns as client demand increases; people want to spend money on products and services that do more than just sell a product or service. They want to invest in companies that do more to create positive social change.

As a result, more and more large corporations have started paying attention to their business’s gender diversity, particularly at senior management and board level positions.

Salesforce and Virgin recently announced their commitment to equal pay, equal advancement, and equal opportunity, while Pimco, Fidelity and Vanguard have linked with a professional body to tackle underrepresentation of women in the UK.

However, analysis of the 2017 Female FTSE Index has found that the number of women in senior roles in Britain’s biggest 100 companies has barely changed in the last 10 years, with the proportion of women holding the most influential non-executive positions is just 8% compared with 6% a decade ago.

While many companies are quickly realising that this is an issue that needs addressing, it’s apparent that some corporations just ‘get too comfortable’, happening often when board members do not want to leave and, ultimately, the company doesn’t want to change – or doesn’t know how to.

Adding to the Bottom Line

There is tangible value to having women in senior positions. Men and women view risks and opportunities in different ways, and thus the present diversity of thought when it comes to business strategy.

For example, although female-led companies make up only 9% of Blackbird’s portfolio, they contributed to 20% of the value.

As highlighted in Grant Thornton research, men may be more inclined to take risks which can result in big rewards, but also big losses – women tend to moderate extreme behaviour and also possess a higher social sensitivity. A diverse, mixed gender team balances risk and opportunity strategies.

Scott E. Page – a leading researcher on the importance of diversity stated in The New York Times:

“Diverse groups of people bring to organizations more and different ways of seeing a problem and, thus, faster, better ways of solving it. Anyone of us can get stuck. If we’re in an organization where everyone thinks in the same way, everyone will get stuck in the same place.”

With this at the forefront of our minds, today we celebrate International Women’s Day at GK, where we lead by example with strong social and governance policies. We are proud not only of the impressive women who make up the majority of our company senior management team but of the forward-thinking attitudes held by all of our staff.

For more information on how GK can support your business’s ESG strategy, contact Megan@gkstrategy.com

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