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Gender Diversity Increases Business Effectiveness and Profit

17 January 2013

LONDON, January 17, 2013 – Global law firm Reed Smith has today launched a new gender diversity report in partnership with Winmark, which reveals how international companies can get the best return from investment in their gender balancing programmes.

The "Gender Balancing: It's Good Business" report, commissioned by Reed Smith in partnership with networking and research firm Winmark, surveyed a range of FTSE100, FTSE250 and leading firms to determine UK businesses’ level of commitment to gender diversity and practical initiatives.

The report’s findings reveal that overall business effectiveness and profit is enhanced when women are included in every level of enterprise, and that while women's advancement has previously been seen as an issue of fairness and equality, it now strikes closer to the corporate heart and is about company performance and ultimately fiscal accountability. It examines how gender balance can be perceived as a means for businesses to become more productive and profitable rather than simply a tool to make work fairer to women.

The report points to five recommended steps to take Gender Diversity from rhetoric to reality:

  1. Establish a clear business case
  2. Obtain real leadership commitment
  3. Focus programmes on leaders and future leaders (not just women)
  4. Set incentives for compliance
  5. Communicate successes and brainstorm failures to find improvements

Key findings from the report include:

  • 74% of respondents felt that quotas are counter productive.
  • Although 57% of leaders are active advocates of Gender Balancing, only 40% are confident that they will meet their targets.
  • The most widely offered gender balancing programmes are not necessarily the most successful. Most organisations have the relevant flexible working policies, disciplinary policies, counselling and coaching. However, these programmes do not appear among the remedies deemed most effective and they are not the initiatives that are improving progression.
  • Formal sponsorship to promote high-potential women leaders was identified as the single most successful initiative to improve progression. Yet less than a quarter of organisations have a sponsorship approach in place (23%).
  • Spending time and money on programmes to “help” women may be counterproductive in that they feed the existing stereotypes that women are less competent .
  • Where gender balancing initiatives are not working, it is often because organisations are relying on their own expertise rather than asking the people for whom the programmes are designed what would work.
  • Research revealed that women were equally guilty of bias against their own gender. The unconscious and innate biases that impede the advancement of women hamper corporate efforts to meet diversity targets.

Discussing the report’s findings, Richard Swinburn, London Office Managing Partner at Reed Smith, said: “Gender Balancing is often seen as a women’s issue of fairness and equality. It’s not. It is part and parcel of talent development and the activity of companies to deploy diverse teams of talented people. Diversity isn’t simply about levelling the playing field; it’s about company performance and ultimately financial accountability – which comes down to plain good business sense.”

Alex Wright, Head of Research at Winmark, commented: "Given the gender imbalance in the leadership and talent pipelines of UK organisations action must be taken. The report takes the cumulative good practice of leading organisations and presents five recommended steps to change. Readers should embrace these and actively consult with their businesses to plan how best to improve performance through diversity."

Reed Smith and Winmark officially launched the “Gender Balancing: It's Good Business” report at a panel discussion attended by the firm’s senior partners, founders of the 30% Club* and other executives at their London offices on Wednesday 16 January.

Tamara Box, Partner and Global Head of Structured Finance, Reed Smith, said: “Gender balancing is not about 'fixing the women' or helping women to become more like men. Rather, it is about helping businesses ensure that they get the best from their whole talent pool. Therefore, it is as necessary to equip our managers (senior and junior alike) with the skills to reach into the talent pool and sponsor and promote real talent - even if such individuals haven't expressly asked or been self-promoting - as it is necessary to encourage our talented employees to take responsibility for managing their careers and professional growth. Only by working to change business culture from both the top down as well as the bottom up can we really achieve diversity and get all the resultant benefits that have been so well researched and proven.”

Marking the reports launch Christine Brown-Quinn, Managing Director, Women in Business Superseries, said: "In business, if people aren't judged and impacted (especially in pay & promotion) by how they behave as managers and develop staff, then we aren't going to make progress. Mentoring and sponsorship is essential. Change is about developing people, and that is part of any business. If that culture isn't ingrained in the performance of an organisation, then that company is failing."

Lynne Freeman, Partner and Head of Reed Smith’s UK Women’s Initiative, said: “While 59 % believe that leaders are advocates, only 40 % believe we’ll get there. We need to stop perceiving diversity as a ‘women’s issue’ – it is a business issue that greatly influences corporate performance, and is fundamental to achieving economic growth.”

Kate Grussing, Founder and Managing Director, Sapphire Partners, said: "We need to take the conversation past board-room diversity and quotas and open it up to the pipeline discussion. The vast number of investors still don't question companies enough. Diversity initiatives need to be held up to scrutiny and companies should look at the ROI they are getting from them. It may be the case that some male leaders are hesitant to overhaul investment in diversity initiatives, but they need to stop the ones that don't work and invest in ones that fit their company’s individual needs."

Henrietta Royle, Senior Executive Coach, added: "Men are very good at getting sponsors and being sponsors in the workplace, while women tend to get left in corners. Women need to do more sponsoring and they need to make sure that they are getting sponsored. A corporate initiative behind that is very important. The business case argument for diversity is key."

#GenderBalancing

-ENDS-

* The 30% Club is a group of Chairmen voluntarily committed to bringing more women onto UK corporate boards

Note to Editors:

About Reed Smith

Reed Smith is a global law firm, with 23 offices and more than 1,700 lawyers in offices across Europe, the Middle East, Asia and the United States.
For further information please visit www.reedsmith.com or contact Jeyda Star (PR Manager EME) on +44 (0)20 3116 2571.

About Winmark

Winmark is a “world class” standard in the management of membership communities and has been a leader in this field since 1996. Today, over 1,000 directors choose Winmark networks to source new ideas, learn from the best of their peers and to keep abreast of cutting-edge management best practice. Member organisations range from the largest FTSE & Fortune companies, to leading professional services firms to central government departments, representing trillions of dollars in revenues and millions of people in global headcount.