By: Hannah Zhang
PwC, along with other HeForShe Champions, has recognized gender equality as a business imperative by connecting the dots between women and the economic opportunities in front of them.
It is a well-established fact that a gender gap exists in the corporate world. Studies have shown that not only are women far less represented in the senior management group, but are also paid less than men for identical work. Although it’s a global consensus that improving women’s participation in the labor force benefits companies as well as the world economy, the change has been painful and slow. Fortunately, some global companies have seized the initiative and made bold actions to address this issue in recent years. While imperfect, these solutions demonstrate the vast potential and absolute necessity of promoting gender equality in the corporate world.
HeForShe, the United Nations Global Solidarity Movement for Gender Equality, is one of the most representative initiatives that show the collective efforts from global CEOs in providing women with equal economic opportunities. Since its launch in 2014, more than 10 global CEOs (including those of PwC, McKinsey & Co., Barclays, Vodafone and so on) have become HeForShe Champions, making an impact as key decision-makers and driving the change from the top by making gender equality an institutional priority. For example, women’s representation in McKinsey & Co’s new hires has increased from 39% to 43% since its partnership with HeForShe. More impressively, the board of directors of PwC’s global leadership team has seen an increase in women’s ratio from 20% to 50% in 3 years.
As one of the most active and responsive partners of the HeForShe Initiative, PwC not only makes achieving gender parity a foreseeable vision in the business world, but also provides the rationale for the necessity of doing so. According to its research project undertaken in collaboration with The Crowdfunding Centre culminating in the release of the Women Unbound: Unleashing female entrepreneurial potential report, women are indeed discriminated against in the business world. The study has shown that the “grey suit factor” has substantially influenced the decision of senior managers who are in charge of the traditional routes to funding small business startups. That is to say, men in grey suits who work for venture capitalists, angel investors and other traditional funding channels predominately make the decisions on who receives funding. Traditionally, not only are those institutions made up by mostly men, but also these men prefer to fund businesses that are led by men. But when it comes to crowdfunding, “a disruptive innovation” that enables entrepreneurs to “engage and interact directly with the market”, the stereotypical image of grey suits no longer exists. Startups are now left to the market itself to judge, and not surprisingly, women are equally or even more successful in reaching their finance goal. In almost all fields — from education to enterprise, from media to retail — the report shows that women consistently outperform men when the market, instead of “the men in grey suits”, is in charge of the funding decision. Even when it comes to technology, a sector traditionally considered more “masculine”, 13% of women are successful in achieving their funding goal compared to just 10% of men. The success that women have achieved in crowdfunding not only proves the vast potential of female entrepreneurship, but also justifies the claim that women are indeed treated differently when trying to access finance through traditional routes.
Thus, this should be a wake-up call for everyone as many great business opportunities have been missed due to the gender biases in funding decisions. According to a new McKinsey Global Institute report, if the UK could match the US levels of female entrepreneurship, £23 billion gross value would be added to its economy. Moreover, if such a gap could be closed by 2025, then $12 trillion could be added to global GDP. To recognize women’s potential in the business world, California has made the first move by passing the New California legislation SB-826 in late August, which mandates that all California company boards must have one female director by 2019. In addition, it also requires that companies with 5 directors must have 2 women directors and companies with 6 directors must have 3 women directors by 2021.
While it is indeed a relief that some global companies and state governments have pioneered in advancing gender equality by dedicating time and effort to increase women’s representation in the global scheme, there remains more to be done. First and foremost, a Women Matter study showed that gender diversity was a top-ten strategic priority for only 28% of companies, and for a third of companies, it was not on the strategic agenda at all. Secondly, in the example of women’s success in crowdfunding, although women-led campaigns tend to have a higher return, women themselves are far less confident than men are. Not only are there more men than women who seek finance through crowdfunding, but they set more ambitious goals and are often more self-assured about their career paths. All in all, companies like PwC, McKinsey & Co. and other HeForShe Champions have set good examples by implementing game-changing commitments to advance and achieve gender equality, but more needs to be done in terms of raising gender awareness and improving women’s financial quotient.
- Gender equality: Taking stock of where we are https://www.mckinsey.com/business-functions/organization/our-insights/gender-equality-taking-stock-of-where-we-are
- Women in Work Index 2018 https://www.pwc.co.uk/services/economics-policy/insights/women-in-work-index.html
- Op-Ed: How Seed Crowdfunding is Unleashing Female Entrepreneurial Potential http://theglasshammer.com/2017/10/16/op-ed-seed-crowdfunding/
- How advancing women’s equality can add $12 trillion to global growth https://www.mckinsey.com/featured-insights/employment-and-growth/how-advancing-womens-equality-can-add-12-trillion-to-global-growth
- Women unbound: Unleashing female entrepreneurial potential https://www.pwc.com/gx/en/diversity-inclusion/assets/women-unbound.pdf
- California Mandates Female Representation On Public Company Boards https://www.forbes.com/sites/allbusiness/2018/10/01/california-mandates-female-representation-public-company-boards/#329117aa1775
- HeForShe Emerging Solutions Report 2018