Diversity and inclusion: Lessons from top business leaders

Gender diversity is not just a female issue; it’s a business issue.

That was one of the main takeaways from the 2021 SHE Conference, Europe’s largest gender diversity conference. In one session on inclusive leadership, top leaders from the Nordics and beyond came together in the online forum to discuss the business value of gender diversity and how to create an inclusive workplace.

Investing in female leaders pays off

Speaker Snorre Storset, Head of Asset and Wealth Management at Nordea, pointed to mounting evidence that gender diversity matters for companies’ bottom line. He cited one Nordea study from 2017, which analysed 11,000 companies globally and found that those with a female CEO or chair of the board outperformed other companies, with a 25% annual shareholder return over an eight-year period – more than double the 11% delivered by the MSCI World Index.

In another Nordea study from 2018, the research team behind Nordea On Your Mind looked at the financial impact of having a more gender-diverse leadership team and found a significant effect on the stability of return on capital. Companies with more gender-diverse management teams had 46% lower volatility in returns compared to less diverse peers.

“I don’t believe that our studies show that women outperform men generally,” said Storset. “But I do believe that there’s strong indication that diversity beats homogeneity. So that when you bring more perspectives to the table, you actually also enable better decision-making, and therefore you get better results.”

Using diversity to create a business model

Another speaker, Sigve Brekke, CEO of Norwegian telecoms provider Telenor, described his company’s journey in Asia as an example of how to make gender diversity part of a company’s business model.

In countries like Myanmar, Bangladesh and Pakistan, Telenor employs a significantly higher percentage of women compared to the average percent of women in the corporate sector in those countries.

“This is a way for us to build a company culture and stand out as an employer. But also, with that, standing out in the way we’re addressing the market and the customers,” said Brekke. He noted that the company introduced a six-month maternity leave for all female employees – “a big, big thing,” he said, which not only attracts female employees but helps keep them after they have their children.

“These are just examples of how you can actually use diversity to create a business model. And that’s what we’ve done in Asia,” he said.

Gender diversity is not just a nice-to-have for companies, it’s a strategic necessity, according to Christin Bøsterud, managing partner of Ernst & Young Norway, which runs the SHE Index that measures companies in Sweden and Norway on their gender balance. She noted that many organisations are requiring their suppliers to have a focus on diversity and inclusion.

“That’s a good thing because then we’re also using the power we have as buyers of services or goods to push the agenda… If you’re really going to tap into the best talent pools and keep clients and customers happy, you also need to get the whole D&I (diversity and inclusion) message right,” she said. Bøsterud stressed that it’s not enough to go after diversity; it’s also critical to focus on the inclusion part.

It’s about more than just the numbers

One panelist with a compelling message on inclusion was Caroline Farberger, CEO of ICA Försäkring, the insurance arm of Swedish grocery retailer ICA. Farberger, who has had a successful career in the financial services industry for 25 years, transitioned from man to woman over two years ago. She said that, as a man, she had considered herself highly educated in the areas of diversity and equality, but just months into living as a woman, she realized she had not fully understood the issue.

“What I didn’t see were all those social structures, the corporate culture and the unseen rules in the busines environment, that were actually an impediment to women making a career on the same equal terms as me as a previous man,” she said.

Since her transition, she has made inclusion her mission, striving to create a culture and environment where everyone can be themselves and make a career on their own terms.

She said that as a male CEO, then called Carl, she had an authoritative style and tended to favour and listen to other men with a similar style.

“The difference now is that as a CEO, I really try to lead my management meetings with inclusion in mind. I really put in an effort to listen to all perspectives around the table and resist the temptation to make up my own mind before I have listened to everyone around the table – especially those who think differently than myself,” she said.

How to build an inclusive culture

One common refrain from the panellists was that an inclusive culture comes from the top.

“As a leader, you need to understand that you are responsible for the culture throughout the organisation you are leading,” said Farberger.

The speakers also shared some tangible tips on how to create an inclusive workplace:

• Look at the attrition rates, said Mita Mallick, Head of Inclusion, Equity and Impact at Carta.

“If five women of colour have left a team in the last five months, don’t look at the excuses of what the market dynamics and competition are. Ask yourself: What is going on in that leader’s team?” she said.

• Do 360 feedback on leaders.

Feedback on leaders is crucial, said Mallick, but don’t have the leaders select their own people to give the feedback.

“I, if I am bullying, am quite adept at managing up, so I would pick the people who will say really good things about me,” she said.

• Watch for changes in employee engagement.

“When your most passionate, engaged people go quiet, ask yourselves why. Why are they suddenly disengaged? Because I promise you there’s a story there you haven’t heard yet,” she said.

• Make unconscious bias training mandatory for senior leadership, urged Sheree Atcheson, Global Directory of Diversity, Equity and Inclusion at Peakon.

“Please don’t do this training ad hoc. It must be mandatory for your senior leadership; it must be part of their progression, part of their employee experience,” Atcheson said.