Yuko Nakamura, Alpha and Associates interviews Bloomberg Chairman Peter Grauer for President Woman.
What should we do to make our company a better place to work? Bloomberg is known as being at the forefront in creating a positive work environment, and during his visit to Japan, we sat down for a conversation with the company’s chairman, Peter Grauer.
Yuko Nakamura: As Japan confronts the issues of an aging population, low birth rate and labor shortage, the importance of diversity is now being recognized in terms of leveraging the capabilities of women in society and in corporations. Many companies are now undertaking diversity initiatives, but why is diversity important in the first place?
Peter Grauer: If you are trying to solve a problem and you bring in four men with the same background, you are only going to get the same kind of ideas for the solution. On the other hand, if you ask four people of different backgrounds, cultures and gender to solve the problem, you will get a number of ideas coming from different perspectives. This is very important in the management of a company – good decision making as a result of incorporating diverse perspectives – and it leads to strong financial performance and results.
In many markets, it is women who make purchasing decisions. So when product development and sales are done only by men, this could result in misplaced assumptions [about what customers want]. The fact that involving women in corporate decision making is effective has been demonstrated clearly in America by Macy’s department store and Estee Lauder cosmetics company. In both companies, women make up more than half the executive team.
These days, the world’s investors favor companies that practice diversity and increasingly companies that do not are being discounted as investment targets. Increasingly, it is believed that companies that do not pursue diversity are behind the times, and that they will not achieve growth and their share price will not increase.
YN: What kind of policies are effective in promoting diversity, in particular the employment and promotion of women?
PG: Using Bloomberg as an example, I think there are four key points: employment, career development, long-term employment and new ideas. The first thing is to hire people from diverse backgrounds. It is a good idea to set concrete numerical targets such as having women in 30% of influential positions within the company. It is important that after they have been hired, that employees regardless of gender or race are given opportunities for training and education to develop their career. At Bloomberg, we give employees opportunities to transfer to other departments if desired or to try different projects. If an employee demonstrates strong performance, it is reflected accordingly in salary or promotion.
New ideas can be little things. For example, we have a central location where we distribute Bloomberg Professional Services, the physical hardware, to different parts of the world. We found that we have very few female employees in the warehouse. We changed the job descriptions and made them more user-friendly, and as a consequence, we have been able to hire women to work in our supply chain operation.
YN: What is of importance in implementing specific policies like that and producing results?
PG: First of all, the tone at the top of the organization has to be very strongly in favor of diversity and inclusion. Secondly, the leadership at the top also has to be very persistent in holding people accountable for achieving the goals of greater diversity. They must fully understand what the leadership is thinking and move as one team and with a sense of mission. If the company head is a man, there must be enough women in this team. The third point is to set numerical targets and commit to achieving them. The fourth has to do with the workplace environment. Whether your employees are male or female, it is important that they feel that they are valued and appreciated. This is key for [a positive] corporate culture.
YN: Sadly, in Japan it seems that there is still insufficient understanding of issues regarding the employment and promotion of women. What can be done to encourage male corporate leaders to pay attention to this and take action?
PG: Business managers understand numbers so it is very effective to use data [to get the point across]. A number of years ago, a large number of companies and research institutions such as MSCI and UBS published data, which objectively proves that the promotion of diversity and having female executives participate in decision-making improves companies’ performances.
When global institutional investors select investment targets, they give significant weight to these data and increasingly companies that lack diversity is rated poorly and passed over for investment.
In light of this trend, Bloomberg developed the Bloomberg Financial Services Gender-Equality Index (BFGEI) for investors, which we began publishing in 2016. We published the second index in January 2017.
In producing the index, we sent gender equality and diversity surveys to financial companies around the world. We take the responses and allocated points according to the various practices and policies in place. Companies with 60 points or more are included in the index. Twenty-six companies participated in 2016. The 2017 index expanded to 52 companies from 17 countries, including four from Japan. The survey covers a wide range of topics including product offering supporting woman and degree of community contribution. It is fantastic that the number of companies that were included in the index has doubled in the 2017 index. Looking ahead, we expect to see significant increases in participating companies.
Answering the survey involves making public certain information about your company so it has a positive effect on transparency and trust. As the number of participating companies increases and they work to improve their scores, diversity is being promoted, so this index has the power to drive gender equality. We are optimistic that it will provide the impetus for more companies to have a conversation about gender equality in the workplace and promote information disclosure. To create a workplace that can respond to changes in society, it is essential that women are given support. Without this support, it will be difficult for a company to stay competitive. When women’s abilities and perspectives are utilized in decision making, performance improves, social contributions increase, and a virtuous cycle is created whereby both the company, the individual, their teams and society benefit.
YN: You are also a founder of the 30% Club in the U.S.
PG: The 30% Club was started in 2010 in the UK by Helena Morrissey. Through voluntary actions led by chairmen and presidents of leading global companies, it aims to have at least 30% of senior corporate roles filled by women. For 15 years, Helena was CEO of an asset management company with $65 billion under management – and a mother of nine! I was asked to speak with her directly and [that conversation] resulted in me starting and managing the 30% Club in the U.S.
The U.S. chapter of the 30% Club includes investor Warren Buffet and the heads of leading global companies, including McKinsey, and Facebook COO Sheryl Sandburg. I think that this shows that diversity needs the firm belief of leaders who must push it forward.
Do you know about the bronze statue of a young girl that was placed in front of Wall Street’s bull on March 8 this year – International Women’s Day. The statue was installed by Boston-based financial company State Street Global Advisors which aimed to communicate this message in a very strong way.
YN: Unfortunately, International Women’s Day hasn’t generated much of a stir in Japan yet. The working environment for women in Japan has not been put in order and it could be difficult for women to reach positions of importance. What is your view on this?
PG: I am not an expert on the situation in Japan but I get the sense that women in Japan have a greater responsibility in terms of rearing children and caring for elderly relatives than women in other countries. Of course, to address this challenge, the public systems and institutions must first be supportive. And I hope there is improvement in that area. However, I think it is important that companies provide support where public institutions are lacking. At Bloomberg, we offer leave for childcare and nursing care. This is not only available to the primary caregiver. I think that this is a particularly important theme in Japan where the aging population and low birth rate are concerns. A company’s employees are its assets and it is important to be able to retain good talent. If a company aims to improve its results, it should look after its employees, appoint women, and promote diversity. I hope that all companies recognize this principle and put it into practice.
After the interview
Speaking with Mr. Grauer I got the sense that he believes in women. He believes strongly that “Women are capable. They are strong and appealing [employees]. The company’s mission is to create a positive work environment for women and bring out their capabilities. In that way, both the company and society benefit.”
This confidence must come from experience working as a director and advisor in Europe, the U.S. and Asia, where men and women of different races, nationalities and religion work side by side.
I lived in the U.S. for a few years and got a taste of this diversity. I lived in a white neighborhood, went to a black church, participated in a Chinese tai-chi class, and worked at an elementary school where 80% the children were African American. There were significant differences in values depending on race, mother language and gender, so confrontation and discrimination were daily occurrences. It was a real accomplishment and joy when those differences were overcome and there was mutual respect and cooperation.
What I noticed when I came back to Japan was that while this country is safe and clean, its uniformity can feel boring and claustrophobic. Women tend to hold back and diversity here is lagging quite far behind.
I hope to see a male CEO in Japan like Mr. Grauer who really hammers home that companies that don’t [give opportunities to women] are unacceptable. Furthermore, it is important that women break down the walls within themselves.
This special interview was conducted by Yuko Nakamura, Alpha and Associates. It first appeared in President Woman.
About the 30% Club
Launched in the UK in 2010 by Newton Asset Management CEO Helena Morrissey. Objective to increase representation of women in senior roles to 30% or above and achieve growth through diversity by improving the balance of men and women in leadership. Membership is open to corporate leaders. Ms. Morrissey asked Mr. Grauer to establish a chapter in the U.S. in 2014.
Female representation in countries where 30% Club chapters exist:
- UK: 12.5% in 2010 to 27% today (FTSE)
- U.S.: 23.3% (S&P100)
- Canada: 18.5% (TSX Composite)
- Australia: 25.3% (ASX-200)
- Hong Kong: 11.6% (Hang Seng-50)
- Malaysia: 17.7% (FTSE Bursa Top100)
- South Africa: 17.1% (JSE Top 40 & SOEs)
- Ireland: 10.3% (ISEQ Overall)
For more on this topic, we suggest the following articles: