Corporate sustainability goes far beyond carbon emissions and water efficiency. Workplace gender equality is quickly catching up to science-based targets and circular design in terms of the elements crucial for building businesses that can compete in a rapidly evolving economic landscape that values social and environmental responsibility.
I spoke with Unguresan to learn more about why having a global certification for workplace equality is imperative and why gender equality is less about corporate responsibility and more about true sustainability.
What spurred the development of the EDGE Certified Foundation and certification system?
The EDGE Certified Foundation came into being in 2009, around the same time that McKinsey was coming out with the first studies on when women thrive, and showing positive correlations between performance and a better gender balance in organizations. The awareness around the importance of gender equality for the health and wealth of organizations and societies was mounting. We realized that the only way to create sustainable change around workplace gender equality was to look at it in the same way as any other business topic. Therefore, we needed to have a clear system in place to measure current status and progress, accountability, results and to set standards of excellence. We knew that if we didn’t apply the same rigor and discipline in pursuing workplace gender equality as we do in pursuing critical business goals, we would not be making sustainable progress.
In the beginning, the challenge was how to measure gender in the workplace in a consistent way across different industries and geographies. That was our ambition from the very beginning — recognizing that every company is unique and has its own strengths and opportunities for improvement when it comes to gender balance. However, we realized that there were two universal, underlying principles that held for everybody: the need to attract, develop, retain and motivate a richer and deeper talent pool — not only half of it — and the growing need of both men and women to live and work differently in the 21st century.
How diverse is your company, really?
Hear how organizations can cultivate the business leadership and innovation approaches required for a more inclusive and equitable economy — at SB'19 Detroit, June 3-6.
We spent two years understanding how to measure gender in the workplace consistently across geographies and industries. We then launched the concept of the EDGE certification at the World Economic Forum in Davos in January 2011. Another two years were spent building the certification system. The first EDGE-certified companies were announced in October 2013. There were six companies from four different industries. We now have around 192 organizations in 48 different countries and in 23 different industries pursuing the goal of gender equality through the EDGE certification system.
That’s a considerable jump in participation. Do you think this is attributed to having the business case for gender equality built right into EDGE?
In EDGE’s early days, the question we got asked often was, ‘Why does this matter for our organization?’ Now, the question is no longer why, but ‘How do we do it?’ This is largely attributed to a combination of two things: A growing pool of deeply and authentically committed organizations and CEOs that believe that this is the right and smart thing to do, and the increasing pressure the eye of the public is casting on this topic. Companies are now subject to more scrutiny on this. Increasingly, there are investor groups out there who have started taking a closer look at how the companies they invest in or lend money to are performing when it comes to gender.
It’s a combination of these intrinsically driven actions and just the right amount of external pressure that put this topic high on the agenda. But while the awareness is there, that does not necessarily mean that we are yet in the stage where we do have all the rigor and commitment and accountability for results. Not yet. But it’s an issue that can no longer be ignored.
What are some of the key challenges and opportunities presented by EDGE assessment and certification?
Firstly, we are working with organizations to define their own case for pursuing workplace gender equality. We already have the studies — McKinsey, Credit Suisse and Catalyst — but we put that generic case aside for a second in order to have an internalized reflection in which companies consider why gender equality matters to them, given the type of organization they are; the type of talent they need to attract, motivate and retain to succeed and continue to be successful; and given the type of market and clients they serve. This internal reflection also explores other questions such as how will women — and men — working in our organization benefit from it?
This is a crucial point, because it dictates how resources and efforts are positioned behind the initiative from the very beginning and it is key for the success of the initiative.
The second step is obtaining data that will back up the business case, allowing companies to check their assumptions on where their strengths or areas for improvement lie and establishing a baseline against which to measure progress. The data provides a systematic and structured approach for how organizations can look at their human capital sustainability from a gender lens.
The third point comes with certification. The accountability and transparency embedded into the EDGE process opens up fantastic branding opportunities — something more companies could be exploring in greater detail: looking at how they can turn their commitment to closing the gender equality gap into a credible claim and into an essential component of their brand and their fundamental values.
What is EDGE’s process for measuring and advancing gender equality? What metrics are used to measure this?
Companies are measured on four fundamental pillars that define success in workplace gender equality:
- Gender representation in the talent pipeline of the organization — we look at where men and women are in the organization, in which type of roles or functions, how they are hired, how they are promoted and how they are retained by the organization from the very first operational level all the way up to the non-executive board level and through all the different management levels of responsibility in the organization.
- Equity — we compare men and women that have similar skills and competencies and equivalent jobs, and whether or not they are being paid the same wages.
- Effectiveness of existing policies and practices that organizations put in place to ensure equitable career flows.
- Inclusiveness of the culture — we survey the employees of the organization on how they feel about their career development opportunities.
Do you notice any trends in terms of where the biggest gaps exist in regards to these pillars?
One issue, in particular, that has become front and center is equity. Some years ago, there was a lot of nervousness around doing detailed analysis of equity, especially in the US. There was a lot of concern about the potential of unwanted legal consequences of this type of exercise and this created a serious obstacle for the advancement of the conversation on pay equity.
This is no longer the case because we have seen leaders in the corporate world, such as Marc Benioff of Salesforce, speak publicly about proactively managing pay equity. There is no other way to ensure pay equity than to measure it, and then doing it over and over again.
We started to be much more detailed, much more analytical and the proactive management of pay equity has gradually become a more generally accepted business practice. Of course, we do see that across industries and geographies that there are still imbalances when it comes to representation across different functions. These structural imbalances persist for now, but hopefully the valuing of different kinds of jobs and skills in organizations will make certain positions and functions more attractive to men and others more accessible to women.
You mentioned differences in performance across geographies. Were there any geographical trends in terms of the four pillars?
It’s more the public policies that are prevalent in some countries that can either help or hinder the conversation on gender equality. For example, when we saw the UK starting to put into place detailed reporting policies on pay equity, it became something that was no longer debatable. That definitely increased the level of expectation overall when it comes to the transparency of the data. Something similar can be said for countries where representation of both genders on boards is required.
So, rather than geographies, it’s really the public policies that make a difference. And the good news is that most of the companies we work with are present across different geographies. Because these companies manage their talent at the global level, they have started to focus on implementing gender equality policies and practices at a global level in a consistent way.
A classic example is that of the US, one of the four countries in the world that does not have paid maternity leave policies. We see that most of the companies we work with that are based in the US, but also operate in countries where paid maternity leave is required by law, will mirror these same policies in their US operations. That is the beauty of companies, that a company culture and a company policy can become stronger than local cultures, customs and policies.
In terms of advancing gender equality, what are some ways companies can improve across the four pillars?
It is a systematic and structured approach that involves looking at the policies and practices in place, and then measuring the impact of these policies by talking to employees about whether they know about them and how they use them.
One of the things we see often in our space is that the formal commitments, policies and practices exist — and sometimes they are beautifully sophisticated — but there is a big gap between the formal commitments and offerings and the informal workplace practices. Consistently checking in, having the triangulation between what the company thinks it does, what employees think the company does and the measurable impact of this — checking the alignments and the gaps between these three points of view — is essential to ensure progress.
This further illustrates your point about how employee surveys are critical for determining where things are going wrong and identifying ways to address the issue.
Once the rigorous work is being done, one of the things that makes a huge difference is this transparency. It allows leaders coming out of the assessment process to go back to their organizations and say these are our strengths, these are our weaknesses and this is how we are going to address these weaknesses. These are the results we are holding ourselves accountable to on this journey. This has proven immensely beneficial.
Transparency is no longer an issue or a layer on an organization’s core purpose, because it becomes fundamental to the way in which the organization works. That’s what certifications do. They create communities of companies that follow the same standards and principles, which organizations can then turn to for inspiration.
Why is having a global certification so important?
On one hand, it’s the aspiration towards global standards of excellence and it’s also for companies who operate across very different cultures and jurisdictions. It gives them a consistent way to look at these aspects across their different markets of practice.
It’s also because global brands manage their talent on a global basis. And while local specificities can coexist, we wanted to create a common backbone that organizations can look to in all of the countries in which they operate, even if their markets are Saudi Arabia, Switzerland, Romania and Chile.
How have the experiences of your early adopters shaped the EDGE system?
Amongst the early adopters, we had two different types of triggers and motivations that brought these companies on board. Some believed they were already doing extremely well and wanted an external verification that confirmed these assumptions that their performance was indeed very good. We also had some companies at the very beginning of their journey, that needed this certification to provide a roadmap to progress.
This is what prompted us to create a tiered certification system. There are three levels of certification for companies at different stages of their journey. Even within the same company, you can have different country operations that are at different stages because workplace gender equality was not consistently driven throughout the entire organization.
By creating a certification system based on continuous improvement, we are helping companies at the beginning of the journey adopt a set of best practices and draw a roadmap based on the best science and experience that exists on this topic, while simultaneously offering a certification system that is able to recognize success for those that have already managed to build gender-balanced organizations with pay equity, effective policies and practices and an inclusive culture.
The second thing we found interesting was how indispensable commitment from the top of the organization is. Without a strong commitment in terms of time, energy and resources from organization leaders, progress cannot happen fast enough. This does, however, require making some courageous decisions, assuming some risks and starting some uncomfortable conversations. Sooner or later, some of these uncomfortable conversations are going to come up and you need courage and firmness to say no, we need to do this. It’s not a discussion about whether we decide to do it or not — it’s about how we do it.
It’s the tough conversations that can help mitigate reputational risk. If the issue is addressed from the get-go, there’s nothing to expose.
Exactly. You create this culture of trust in the organization. Risk of exposure happens because people don’t have access to the right information about whether their organization is treating them fairly. People know changes don’t happen overnight and they know how to recognize genuine commitment and genuine progress. They’re very grateful for that. What we see in surveys of companies that have started the journey some years ago is that people don’t expect change to happen overnight, but they do expect transparency.
Speaking of continuous improvement, companies must recertify every two years. How does the recertification process work?
Companies that are not at the third level of certification — those in the first and second levels — are on their way to workplace gender equality and that’s what they’re being recognized for.
Why is gender equality about sustainability, not just about just diversity, inclusion or corporate social responsibility?
We live in a world that is roughly 50/50. We all believe that talent and intelligence is equally spread across the population, yet if we keep tapping into just 50 percent of that talent pool, how can we think of ourselves as being an organization that will keep up with the changes?
In a world of disruptive business models, agility to adapt to new situations is key. But where does this agility come from? It comes from people, working in organizations that are as diverse as the world we live in. It's very important for organizations to mirror the diverse reality of the world — it is essential in ensuring the sustainability of their human capital and it is a crucial component of their ability to adapt to continuously changing market conditions.