“Women’s equality and empowerment are one of the 17 Sustainable Development Goals, but also integral to all dimensions of inclusive and sustainable development. In short, all the SDGs depend on the achievement of Goal 5.” —The United Nations
A sustainable recovery requires a plan to bring gender equity to the forefront. Women have been disproportionately affected by coronavirus-related job losses, and female small-business owners are also expected to receive less funding help to sustain themselves. An inclusive economy is a must for long-term economic health. By benefiting more people, it’s stronger for everyone.
The undue financial brunt that women are bearing right now isn’t a surprise. When it comes to women and money, history is against us: From property rights to pay inequality, we have systematically been governed by power structures that have limited our financial independence. Put simply, women have historically had less access to capital. And nowhere is this more evident than in the business world.
Mind your Ps & Ls
As someone who has been in banking for the past three decades, one of the parity issues I’ve seen time and again is the lack of women in positions that are responsible for a P&L. Getting more women into positions of true leadership requires that these women have, in short, access to capital. As in life, access to capital in business gives women the power to make decisions that have a measurable, lasting impact.
As the CEO of a bank, I have found that there are a lot of knowledgeable, able women who are domain experts but who have not had the opportunity to make that lasting impact by leading a business. And so I have decided to change the script about what my senior leadership team looks like and how its members get there.
Follow the rule of thirds
Standard promotion practices have historically laddered people up through the ranks of business in a somewhat linear fashion. Unfortunately, because of social hiring forces (which operate much the same way as social funding forces), women and other underrepresented groups have not been given the same opportunities to climb that ladder. One example: men are three times more likely than women to receive specific career information about P&L jobs.
And this brings me to the rule of thirds, which is a rule that I’ve followed in my own career. Always seek a position that is 1/3 comfortable, 1/3 a stretch, and 1/3 pure white-knuckle terror.
With that in mind, I have made it a priority to identify women with the expertise and ability to get the job done, who may or may not have had an opportunity to demonstrate it. I surround them with experienced staff and supportive leadership so that they have a fair shot at success (read: no glass cliffs here), and I’m comfortable with the understanding that they will grow into their position.
Make an investment in women
Despite evidence that having more women in executive leadership positions results in superior financial results, the gender diversity of startup boards is undeniably dismal. A Harvard study found women in just 7% of board seats, with 60% of the companies having an all-male board. When you take this into account with all the other reasons that women get so much less funding than men do, it’s clear that we need a major course correction in financing female entrepreneurship for a lasting economic recovery.
The bigger picture is the bigger story
Access to capital is access to opportunity. With that in mind, financial equality is inextricably tied to women’s equality as a whole—and that is tied to the overall sustainability of our economy and our society. Those of us in positions of executive leadership make history every day, by making decisions that leave a lasting impact on our businesses, on the lives of our employees, and on society.
I call on my peers to make sure that your companies give women positions and opportunities of measurable significance. History is, ultimately, a story. As we write the story of how our nation came out of COVID-19, it is truly up to us to change the script and ensure that women’s access to capital is prioritized as part of a sustainable recovery for everyone.
Nandita Bakhshi is president and CEO of Bank of the West and co-CEO of BNP Paribas USA Inc.