Why diversity in business matters
Japanese Prime Minister Shinzo Abe has made efforts over the past five years in his diversity and inclusion drive and womenomics agenda.But, the ambitious, initial goal of having women account for a minimum 30 per cent of the leadership in Japanese companies by 2020 has been revised to 7 per cent in government and 15 per cent in companies by 2021.
On March 15, the Canadian Chamber of Commerce in Japan (CCCJ) hosted dean of the McGill University’s Desautels Faculty of Management at the Roppongi Hills Club. As part of the CCCJ Speaker Series, Isabelle Bajeux-Besnainou addressed the luncheon guests and workshop attendees on the subject of women in academia.
“In academia, it looks like women are increasingly being represented at universities. Today, the number of women in universities is equal to the number of men studying at undergraduate level worldwide,” Bajeux-Besnainou said. In fact, at McGill University, 58 per cent of the students are women.
Looking at the workforce, however, despite the near 50–50 split, she noted that women tend to hold positions at lower levels in businesses, and that they are under-represented in higher-level positions.
“The other issue is that not only are women not necessarily getting senior positions in companies, but when they are, they are very often put in positions where they are linked to human resources or communications marketing, which are not core functions,” she added.
This often means lower pay compared with other roles, and that those positions are at the most risk.
In business, Bajeux-Besnainou believes diversity is crucial to correctly represent customers. It’s also a moral issue.
“It’s the right thing to do because it’s a matter of providing opportunities. If you are not hiring half the population, it means that you are missing out on a lot of different talents.”
Diversity at companies and on boards is also essential to improving the bottom line, and Bajeux-Besnainou emphasized the importance of bringing a variety of perspectives to business. In terms of problem solving, this is particularly significant.
“Having different approaches in general is just as important in terms of finding the solution for the problem,” she said. She added that the significance of women in consumer spending makes this all the more important, with women representing the largest market opportunity in the world, accounting for about US$20 trillion in annual consumer spending.
Referencing reports by non-profit Catalyst Inc., she said that, with just one woman on the board, the return in equity would improve 53 per cent, return on sales 42 per cent, and return on invested capital 66 per cent. In Canada women make up 25 per cent of boards, while in Japan that number is only 5 per cent.
What is needed, she believes, is a cultural shift, which is not easy to attain in Japan.
“Cultural shifts are probably the most difficult to achieve; it’s extremely complex to change the culture of a company, or to change the culture of a country,” she said.
A mathematician by background and mother of three, Bajeux-Besnainou outlined some of the barriers women face when looking to take on careers in finance.
“When I talk to the banks, they are all very eager to hire women, but they cannot find them because we don’t produce enough of them. So if we’re not addressing that at the university level, then it’s not going to be fixed at a higher level later on.”
At McGill University this means setting up a taskforce to address the minority of women in finance.
With this came an internship program with the Bank of Canada. She noted dramatic changes in opinion after students completed the internship.
“They thought initially that the work environment would not be good for women. And then, after the internship, they found that they had been very happy there and this was the perfect work environment.”