Diversity equals improved business and innovation
Published: April 18, 2019
Updated: April 27, 2019
Author: Luke Jones
CATEGORY: Industry News
Women are the core decision makers within households, taking the lead on choosing home decorations, consumer goods, and vacation spots. However, while being trusted with key lifestyle decisions, women are not being given the same respect in the boardroom.
Indeed, only 4.8% of CEO positions at S&P 500 companies are held by women, says non-profit research firm Catalyst. Specifically within the insurance industry, women hold strong positions up to a certain level before percentages decline for the highest positions.
“We find that at mid-management, women make up about half of the workforce – some studies say 48%, some say 52% – but then when we get to SVP [or] EVP [roles], it drops to 18%, and then when we reach the C-suite and boardroom, it drops to 4%,” said Sophia Yen (pictured), insurance strategy and innovation leader at EY. “There aren’t enough women at the top to mentor and sponsor, which gives birth to the importance of having male champions and male collaboration, and the importance of having male mentors and sponsors, as well as companies needing to get serious about diversity and inclusion because it’s not just about gender equality – it’s also about what’s best for the future of their firm when it comes to diverse teams.”
Yen points out organizational teams that embrace diversity outperform non-diverse teams. Women in top management roles help to drive higher net revenues and profits. Diversity is increasingly becoming something companies have to engage in. For example, A.M. Best has said it will include innovation scores in its ratings.
“This is becoming part of the new normal, and if companies are looking to drive profitable growth and are looking to be innovative and not only survive but thrive, then D&I should be right at the top of the agenda.”
Innovation is now directly connected to diversity and companies must embrace the two together.
“This is arguably one of the strongest correlations we’ve seen in our industry. Diverse teams produce more innovation, diverse teams create out-of-the box thinking, diverse teams then drive higher profits and higher value because of that innovation,” Yen told Insurance Business. “While our industry could be categorized as potentially stodgy, as one of the oldest industries [where] not much changes and it takes us a while to get things going, all of that was thrown out of the window in the last three to five years. There’s more change in our industry in the last three to five years than there ever has been in the last 150, and a lot of that is being driven by the innovation, and the digital
disruption and the new entrants, and if we look at some of those greatest players and greatest disruptors, they’re actually run and led by women, or people from other D&I categories. We all know to avoid group-thinking, to avoid the continuation of the traditional model, we’ve got to shake up who our teams are and the voices in the room.”