While private equity (PE) has made some small strides to improve gender
imbalance, with firms placing
a greater focus on Environmental, Social and Governance (ESG) within PE, there is still progress to be made.
The sector has earned the reputation for being male-dominated, even in
Sweden - a country that takes the top spot in the EU
Gender Equality Index rankings - women account for only
one in five board seats
at portfolio companies owned by PE firms. The notorious gender imbalance
within the sector means leaders cannot hide behind smoke and mirrors.
A better gender balance will support the growth of private equity
PE firms need more females at the decision table for a number of reasons,
one of which is to dismantle microaggressions – a form of everyday
discrimination that
64% of women
admit they face in the workplace. Microaggression can be subtle, for
example, a male calling a female professional ‘darling’ in the workplace.
It’s not to say that microaggressions are always a barrier for women, but
they can often distract and even derail a women’s success in the workplace.
Diverse teams are better at decision-making and can combat groupthink
because, with different perspectives comes the need to weigh up all the
possible outcomes. Of course, this can sometimes impede decision-making,
which is why a strong leader is needed to unite the team. In a similar
vein, a group with unique outlooks is better equipped when it comes to
problem-solving. They put forward more creative solutions, combining their
collective subject matter expertise and applying lateral thinking, making
diverse teams a real asset in the competitive field that is PE.
There are many more benefits to having a workforce comprised of people from
different genders, backgrounds, ethnicities, cultures, religions, sexual
identities, abilities and ages. Their cognitive diversity is what makes
them superior to a team that all think and act in the same way.
However, the combined impact of globalisation, the digital revolution,
ramped up regulations and the pandemic has made it all that harder to
attract, motivate and retain talent – particularly diverse talent. This
poses a challenge for PE – a sector renowned for having a small pool of
highly talented individuals.
