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Business Commentary Why the ‘business case’ for hiring more women isn’t working

Sarah Kaplan, distinguished professor and director, Institute for Gender and the Economy, Rotman School of Management, University of Toronto

Nancy Wilson, CPA, founder and CEO, Canadian Women’s Chamber of Commerce

As we mark International Women’s Day on Friday, many people – including us – will note that not enough progress has been made on women’s economic inclusion. Many will argue that we need to convince more corporate leaders to support the cause and, to do so, we need to make the business case for investing in diversity. Yet, despite a decade of reports from prominent consulting firms and other organizations making just this case, progress in Canada and around the world has stalled. And this very desire to make the business case might be part of the problem.

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It’s not that there aren’t good business reasons for companies to be more diverse and inclusive. But there are two problems with the obsession with the business case logic. First, requiring a business case implies that women and minorities must do better than the (white, straight, male) status quo to gain entry into opportunities. Second, research has found that a business case mindset risks reducing women and minorities to mere inputs to be measured against the financial bottom line. The social goal of diversity is converted into a commodity to be valued, exploited and, perhaps, discarded if the business case doesn’t pan out.

The business case can wrap decision-makers in the comfortable numbness of business jargon, focusing on shareholder value creation or profits while minimizing any mention of marginalized communities or the common good. The business case is designed precisely to remove emotion from decision-making, but the latest research points out that the emotional sense of outrage about inequality is what can drive disruptive action. It is no surprise, then, that diversity and inclusion policies are often no more than window dressing or incremental and incomplete.

If indeed the business case for diversity and inclusion had persuasive power, Corporate Canada would look very different than it does today. In the top 100 companies of the S&P/TSX Composite Index, we find only one female CEO and six women board chairs. Meanwhile, a 2018 benchmarking study on diversity and inclusion revealed a gap between the stated level of support by management and the resources devoted toward implementation of policies in the workplace.

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Diversity and inclusion are regularly discussed as aspirations, or stretch goals. The reality is, equality is codified in the Canadian Charter of Rights and Freedoms, as is freedom from discrimination based on gender, race, ethnicity, and a variety of other factors. Provincial labour laws, such as Ontario’s pay equity and pay transparency acts, protect employees from discrimination, as well.

Many firms will feel that they have complied fully with these laws, but compliance may only be to the letter of the law and not the spirit. If women are not given the same opportunities to work on projects that lead to promotions; or if women who take advantage of company policies for flexible work are seen as less committed; or if a manager schedules daily meetings before 9 or after 5 making it hard for people with school drop-off and pickup responsibilities to participate; or if hiring managers don’t go the extra mile to include women in short lists for jobs; or if male senior executives refuse to sponsor more junior women for fear of false #MeToo complaints; then organizations are not actually working to achieve gender equality.

And here’s another research finding: the legal necessity of equality is not only the law of the land, but focusing on it also eliminates the opportunity to distance oneself emotionally from the crux of the issue: fair and equitable treatment of fellow human beings. Our laws bind us as a larger society under a common ethical and moral umbrella. If the cost of equality is having uncomfortable discussions about what is right and wrong, it is time to pay up.

We are not debating the business case itself. Many are convinced that the case has already been made. However, recent research makes it clear that using the business case as a starting point can be counterproductive. We need to flip the script. Complex social issues such as changing social norms and challenging stereotypes cannot be reduced to a spreadsheet. They can only be tackled with an unreserved, passionate commitment from senior leaders. If someone asks for the business case, don’t bother; they’re looking for a reason to say no or go slow.

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