Why Do We Need a Business Case for Equality Anyway?

Confident young business woman in black suit against whiteBy Melissa J. Anderson (New York City)

How many times have you heard a business leader announcing the oft-repeated refrain: “Diversity isn’t just the right thing to do – it means good business”?

In a recent study by UNC Kenan-Flagler Business School, Mindy Storrie, Director of Leadership Development, discusses the business imperative for gender equality. She writes:

“Women are not only increasingly the primary breadwinners, they are also the world’s largest group in terms of purchasing decisions; studies show that women comprise between 80 and 85 percent of the U.S. consumer market. Combine this with the knowledge that companies with higher percentages of female senior-level managers tend to outperform their competitors, it comes as no surprise that those organizations failing to target women in recruiting, development and retention strategies may miss their bottom-line goals.”

Storrie provides references to several studies showing the business case for gender equality:

  • A Thomson Reuters report suggesting that companies with greater gender diversity perform better, especially in harsh market conditions.
  • McKinsey’s 2007 research showing that companies with more women in senior management had higher growth in stock prices.
  • Another McKinsey report showing that the addition of women to the workforce since the ‘70s has increased the US economy by 25%.

And she also references research on the benefits of female leaders:

  • A recent Zenger Folkman report showing women perform better when it comes to leadership competencies.
  • A Korn/Ferry study showing that women executives perform higher than their male peers in all leadership characteristics except confidence.

And let’s not forget the slew of research done by organizations like Catalyst, as well as consultancies like Deloitte, and many academic studies by universities on the business advantages associated with an increased percentage of women in leadership.

Sure, the business case is widely available and accepted. We’ve discussed it many times on The Glass Hammer. And yet.

As Storrie explains, women are still a significant minority the senior levels of the business, management, and financial space. In addition to that, she continues, women in the C-suite make 13-25% less than their male counterparts. Why isn’t the business case convincing companies to work harder to ensure their women are being treated equally?

The Moral Case

It really seems like the “business case,” however well put together and researched and packaged for corporate strategy it may be, shouldn’t have to exist.

Can we not just agree that diversity is inherently a good thing that companies should strive to achieve? Can we not just accept that women are as good at men at leadership and if companies avoid hiring them then they are just not good companies? Why do we have to prove it with balance sheets?

The constant focus on the dollar signs associated with the recruitment, retention, and promotion of women takes away from the notion that we live in a society that supposedly appreciates and values diverse viewpoints and equality.

Let’s say the numbers associated with the business case weren’t as compelling as they are. Would that mean that companies would not (or should not) work to advance women into positions of leadership? No – the moral case for gender equality would still be there.

Perhaps the fact that gender equality at the top is occurring at a snail’s pace suggests that the business case for diversity just isn’t meaningful enough to those who would have to change their attitudes and behavior in order to promote gender equality. The business case doesn’t push people to think about what it means that we in 2012 live in a culture where women are consistently paid less and respected less than men for no reason other than that they are female.

The moral case for gender equality may be messy and come attached to emotions and hard questions about our shared values. But messiness is what drives people to action. It’s what makes us question our own values and beliefs. It’s what drives us to share our own views on equality with others when we see injustice.

The business case for diversity is important. But it won’t do the job of compelling us toward gender equality in the corporate space on its own. For that, we need the moral case. We need to not be embarrassed or shy about calling on the emotional and values-based reasons for wanting to work in companies where everyone has a fair shot at the top. In fact, leaders should be embarrassed if they work at companies where that isn’t the case. In order to achieve that vision of an equal workplace, we can’t ignore that equality is simply the right thing to do.

3 replies
  1. marie wilson
    marie wilson says:

    It’s wonderful to hear a call for equality as a moral imperative. Actually, the moral imperative was exactly what we assumed would work decades ago.
    More recently, of course, we tried the business case, which while helpful, hasn’t propelled us to the top. But these changes are coming, nudged on by the economic issues that have caused many men to see the value of a more balanced life and polls are showing more willingness among men to trade money for more time with family. Gender equality is coming slowly…..the fierceness of the most recent backlash in the US bears witness to the magnitude of the strength of our forward momentum….but your reminder about the moral case is timely…..

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