By Megan Beyer
When companies have more women in leadership, they make more money. It is nice when the economy rewards the good guys -- even when they are women.
A new tool called EDGE Certification does just that: it delivers profit for parity. Economic Dividends for Gender Equality -- EDGE Certification -- is a stamp of approval signaling a corporate culture ripe for a diversity dividend. It lets companies grow their own leaders by fixing the expensive leaky pipeline. Women often fall out of the corporate pipeline at mid-career before ascending to the highest levels. And yet studies show that once women start to populate the highest ranks of a company, it is good for the bottom line.
Pay inequity obviously causes a pipeline problem -- so EDGE measures and ensures women and men are paid equally.
When women leave a company because they can't manage the work-life balance, companies lose their significant investment in training and development and incur the costs of employee replacement. EDGE rewards successfully implemented policies that allow more flexibility, giving points for a variety of programs -- child care, flexible work arrangements, paid family leave -- that make the balance workable. What results is a better eco-system for women (and men) to remain working during the child rearing years.
Attrition results when women fail to get access to career critical assignments, or mentoring, or the sponsorship and training that are the lifeblood of the old boy network. EDGE companies might help women lean in, putting them in the right networks and opening up important career opportunities.
Aside from turning around an expensive attrition rate, studies show the real payoff of the EDGE Certified workplace is a harvest of women across the talent pipeline. Extensive studies by Credit Suisse, Pepperdine University and McKinsey all conclude women leaders make companies' profits rise.
And companies profit in another way as well. EDGE Certification signals to consumers, job seekers, and even investors that a company gets it, understanding that gender equality translates into business success. EDGE expresses a corporate value and signals that a company has that verifiable combination of measured characteristics -- it is in fact certified as having committed to a "walk the walk" authenticity on gender equality.
This is a unique moment in time for this new EDGE branding tool. At many levels, market stakeholders are gravitating to companies with gender equality.
It is similar to when LEED Certification for energy efficiency was launched in 2000. LEED buildings are certified as meeting clear standards for energy efficiency. Back then, investors started to direct funds to "green" companies. From consumers to job seekers, the market searched for a way to identify businesses authentic about protecting the environment.
LEED certification is measurable and credible based on third party verification of specific energy efficiency criteria. It has become shorthand for whether a company is authentic about being green. Today almost 5 billion square feet of construction space is LEED Certified. Not only do investors direct funds to companies with LEED buildings, employees who want to work for green companies see LEED as a good indicator, as do consumers who want to reward shared values. And, like EDGE companies- there's a bottom line effect: LEED buildings are cheaper to operate.
The same moment has come with gender. The market - consumers, workers, supply chain partners, and investors -- are looking to reward companies that understand the "woman-leadership windfall."
As more women direct investment dollars, they want to know if companies they invest in have truly gender friendly workplaces. EDGE can do that. Governments are looking for ways to make sure their contracts go to contractors that equitably benefit women. EDGE can do that. Companies want to ensure their supply chain benefits their consumer base. EDGE helps there too. With its process of assessing corporate culture through metrics, informed by some of the world's top experts on standards, human resources and workplace practices, EDGE will be a shorthand signal that a company is authentic about gender equality.
The EDGE concept comes from Switzerland, where they know how to engineer everything -- from timepieces to trains. One of the founders, Nicole Schwab, is the daughter of Klaus Schwab, the founder of the World Economic Forum in Davos. For years Nicole, with co-founder Aniela Unguresan and globally recognized specialists on certification, academic data analysis and workplace policies, painstakingly perfected a certification process that addresses key drivers for change. After rigorously testing the tool on different continents, and in different industries, finally, EDGE Certification has come to market.
U.S. Senator Kirsten Gillibrand has an agenda of economic opportunity for women and families. She sees EDGE as part of a strategy of competitiveness for the nation. "Right now women are earning more than half of all college degrees and advanced degrees in America and make up about half of the workforce. If we are ever going to out educate, out build and out innovate the global competition, American women are going to lead the way. It is essential that we update our workplace policies to reflect this reality - so our economy can grow stronger, and our families can achieve some financial security. I am thankful to be working with EDGE to spark this conversation and move from dialogue to real change."
This month we see real change. The first multinational companies completed the process of qualifying for EDGE Certification. Among them are the Swiss offices of IKEA and Deloitte.
"The EDGE certification process and insights are a critical step for organizations to understand what is holding them back and provides a roadmap to achieve better performance and a more diverse organization" according to Sarah Kane, a partner at Deloitte.
The cosmetics company L'Oreal is in the process of working toward EDGE certification in eight different countries including the United States. These multinational companies are now instantly re-branded as companies that really understand the value women, and want to profit from their leadership.
Or as EDGE co-founder Unguresan puts it, "These companies have the seal of approval, telling employees, job seekers, consumers and investors that they are authentically committed to workplace gender equality."
Like a company growing its own women leaders, finally there is a harvest of EDGE certified companies, and corporate workplaces that support women for the sake of profit. These first EDGE Certified companies come at a time when being branded as gender enlightened is a competitive edge. The real success will be when the absence of EDGE Certification is considered a competitive disadvantage.
Megan Beyer is with the EDGE Certification Foundation Board. She is founder of a bilateral women leaders project in Switzerland advocating women’s leadership called Sister Republics. She is a regular panelist on PBS’ To the Contrary.