Apr 6, 2021

IBM: Gender equality, we’ve (not) come a long way, baby

womeninleadership
diversityandinclusion
genderequity
ESG
Laura V. Garcia
3 min
Diversity
Procurement magazine takes a look at IBM's "Women, leadership, and missed opportunities, Why organizations’ good intentions are not good enough...

The global pandemic has brought global disruption, impacting the world economy and countless lives. But as IBM’s women in leadership study shows, the impacts weren’t felt in equal measure. Working women took a mightier blow, with millions forced away from their jobs and back to the home, bringing female participation in the workplace to its lowest rate since 1988.

Compared to 2019, there are now fewer women in the pipeline to fill executive roles, and the advancement of women remains a top 10 priority for only 1 in 4 organisations. 

Between November 2020 and January 2021, IBM surveyed more than 2,600 executives, middle managers, and professional women and men. To gain further perspectives, IBM held a global, two-day virtual “jam” with 3,100 women and gender diversity allies to capture their experiences and perspectives on the topic. What they found was that despite increased awareness and perhaps good intentions, ineffective programs are leading to “gender equity” fatigue. 

As Bridget van Kralingen, Senior Executive Sponsor, IBM Women’s Executive Council and Constituency Senior Vice President, IBM Global Markets, says, “There is a clear need for new models of empathetic leadership. For years, studies—including our own—have called attention to the systemic barriers to career advancement facing women. Still, the percentage of women in top leadership roles has not budged.”

And so, as we roll out of Women's month and into Diversity month, we thought it important to review some of the key findings, and most fittingly, the impacts of stacked biases. As we lay out in the April edition of Procurement magazine and in our upcoming webinar, diversity and inclusion isn’t about goodwill efforts, it’s about good business, and token gestures or rainbow-washing isn’t going to get you there.

Women of colour, the high impacts of stacked biases

Women of colour continue to face layered barriers, penalised for both their race and their gender. Showing the high impacts of stacked bias, IBM reports that on average, black women are paid 38% less than white men, it takes 23 months for a Hispanic woman to earn what white men earn in a year, and only 1 black woman stands as CEO at a Fortune 500.

Furthermore:

  • 34% of all women say they have personally experienced race-based bias, while 28% say they have experienced gender-based bias.

  • 86% of Hispanic women have experienced discrimination because of their ethnicity, and 70% because of their gender.

  • On average, Black women are paid 38% less than white men and 21% less than white women.

  • Women of colour are also significantly underrepresented in professional leadership roles. Only 5 Fortune 500 companies have Black CEOs, and across the senior leadership ranks, women of colour hold just 1 in 25 C-suite roles and white women 1 in 5.

The business case for gender equity

“Organizations that see gender parity as a strategic asset are more successful. They outperform their competition on nearly every measure surveyed, from innovation to revenue growth to customer and employee satisfaction.”— Women, leadership, and missed opportunities, Why organisations’ good intentions are not good enough, IBM Institute for Business Value.

Compared to other organisations, gender-inclusive companies that prioritise the advancement of women report as much as a 61% higher rate of revenue growth.

According to a McKinsey analysis, companies with the most women in top roles can potentially see performance and profits that are close to 50% higher than those with the fewest. 

To download the full report and find out more on how companies are falling short in their efforts to improve on equity and inclusion, click here.

Join me and our specials guests for our webinar, Five Ways to Increase Supplier Diversity and Compliance, on Wednesday, Apr 7, 12:00 pm Eastern Time (US & Canada). 

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Jun 15, 2021

Germany Adopts Revolutionary Supply Chain Human Rights Laws

ESG
DaimlerAG
supplychain
Germany
4 min
Supply chain legislation makes German multinational corporations legally responsible for human rights and environmental abuses across global supply chains

While the title states that Germany’s newly adopted that targets human rights abuse across global supply chains is “revolutionary” ─ which it is ─, it certainly shouldn’t be. But nonetheless, today, on June 11th, 2021, the German Parliament has ushered in a long-awaited shift to mandatory company compliance rules. After months of negotiation, the German lawmakers finally pushed it over the finish line within the final days of the current legislative period. The bill will see German multinational corporations held legally responsible for any human rights or environmental abuses found across their global supply chains. 

“The German government has taken a critical step to ensure that companies operate responsibly,” said Juliane Kippenberg, associate director, children's rights division, at Human Rights Watch. “Respect for human rights in global supply chains is not something that should be optional.”

This news comes at a time when global corporations are already being pushed towards environmental, social and governance (ESG) compliance, with a massive drive to reduce Scope 1, 2, and 3 carbon emissions from their supply chain operations and a concerted effort to avoid suppliers and manufacturers that do not meet the standards that industry-leading companies are now expected to meet. 

Who will the new law affect?

With Germany’s new legislation, organisations that fail to meet the rules and regulations could be forced to pay fines potentially equivalent to 2% of their annual global turnover. However, it isn’t applicable to all.

According to Reuters, under the act, companies above a certain size will be forced to establish set due diligence procedures that prevent the abuses; from 2023, only companies with more than 3,000 employees in Germany will be affected. From 2024, the rules will expand to companies with more than 1,000 employees. 

Statistics from within the country suggest that the first stage of this regulation rollout will affect 900 companies, while the second stage will put 4,800 companies under the spotlight. The bill will also enable the government to temporarily exclude from public tenders companies that receive fines in excess of €175,000. 

“Incalculable risks arise for companies,” said Joachim Lang, general manager at the Federation of German Industry. A word of warning from a respected leader, at a time when industry lobby groups and wholesale businesses fear that the new law increases bureaucracy and suggest that price rises may be inbound. 

The Take of German Giants

After looking at the incoming legislation, Daimler AG, known more commonly as the automotive giant Mercedes-Benz, a company which, should there happen to be any ESG-compliance issues along its multinational supply chain, would pay a hefty fee, is welcoming of the push for change but hesitant about certain aspects of the bill. 

“Daimler's position is: The respect for human rights is a central aspect of our sustainable business strategy. We, therefore, welcome the progress made on the Supply Chain Act. Although the regulations are very ambitious, the proposed legislation has a sound approach overall. It is based on internationally recognised human rights and on international agreements. And it gives companies more legal certainty in an area that has so far only been partially regulated.

Supply chains are not "chains" but rather exceedingly complex networks: Daimler alone has over 60,000 direct suppliers - and many more sub-suppliers. For this reason, we also consider the proposed risk-based gradual model to be sensible. The responsibility of the companies lies primarily in their own business area and with their direct suppliers. Companies must then take action in the deeper supply chain if there are concrete indications of human rights violations. Daimler AG already does that today. 

Even though we support the proposed legislation in principle, we consider some aspects to be critical, e.g. the planned fines of up to 2% of the average annual turnover. Instead of threats of sanctions, we consider concrete measures, which companies must take in the event of deficits, to be more expedient. In addition, certain wordings are still vague and leave room for interpretation. Terms such as, e.g. "fair standard of living" should be phrased precisely in order to create legal certainty. Furthermore, documentation and reporting requirements should not lead to unnecessary bureaucracy and should be harmonised with existing rules. On the one hand, this does not help the people on the ground, and on the other hand, it puts a burden on the companies – and the implementation can pose substantial challenges for smaller companies in particular.”

This law is arguably one of the most important developments in the supply chain space so far this year. But it must be remembered that changes do not and will not happen at the push of a button and that democratic principles should be applied to the discussion prior to enshrining legislation into tablature. Environmental and human rights advocacy is a hike, not a brisk walk around the park ─ so, for German companies, it’s time to get their boots on the ground and start assessing their global, interconnected supply chain operations. And, hopefully, they’ll set a stellar example for the rest of us.

 

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