How we measure stakeholder capitalism will determine our recovery

(Liam McGarry, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Katica Roy, CEO and Founder, Pipeline Equity


  • Common metrics, which take account of gender and race, will stimulate global efforts necessary for inclusive capitalism to thrive.
  • Taking account of gender and race within those metrics will ensure there are no blind spots.
  • Machine learning and cloud computing are necessary to help companies assess progress towards their goals.

In less than 12 months, the United States lost 22 years of progress towards gender pay equity and 32 years of progress towards gender parity in the labour markets. If we don’t recuperate these losses now, we will not only face a sluggish economic recovery, we will also experience greater levels of inequity in the decades ahead.

If, for instance, the labour force participation rate among mothers persists post-COVID, the wages of US families will shrink by $64.5 billion annually. This decrease in household wages directly impacts the 28 million US children (29% of whom are Black) who rely on breadwinner moms for their economic security. Indirectly, a decrease in household wages depresses the entire economy via dampened consumer spending, increased reliance on social welfare programmes, and higher levels of poverty.

Common stakeholder capitalism metrics are critical for our economic revival

The adoption of common stakeholder capitalism metrics as proposed by the World Economic Forum in September 2020 provides one of the most promising avenues to restore the gender-imbalanced losses of the past year as well as strengthen our post COVID-19 economy.

Four pillars of stakeholder capitalism.
Four pillars of stakeholder capitalism. Image: World Economic Forum

Achieving gender equity across all races and ethnicities could expand the US economy by $2 trillion. But at current rates, we will be well into the year 2228 before achieving gender equity in the US. Now is not the time to walk back from our commitment to gender equity. If anything, we must be all the more diligent in pursuit of it.

The common stakeholder capitalism metrics are a step in the right direction for our economic future because they stimulate corporate, regulatory, and global efforts necessary for a more inclusive and equitable form of capitalism to thrive.

To take these common metrics a step further, companies will need to:

1. Integrate them with intersectional data to avoid creating blind spots, and

2. Use advanced technologies such as AI and cloud computing to implement their commitments to stakeholder capitalism

Considering how, in the span of eight weeks, the pandemic accelerated digital adoption by five years, now is the opportune moment to implement these changes in pursuit of equity for all.

Why intersectional data is critical to achieving stakeholder capitalism

In the time between the publication of the stakeholder-centric Davos Manifesto 2020 and now, we’ve witnessed the destruction wreaked by a global pandemic that’s fallen disproportionately on the shoulders of women. There are few signs of it relenting.

During this same time, as the pandemic and its related fallout spreads across the globe, Brian Moynihan, CEO of Bank of America, was working with the big four accounting firms in partnership with the World Economic Forum to decide how to measure stakeholder capitalism. If organizations no longer exist to maximize shareholder value, then traditional financial reporting will not suffice to assess corporate progress. We need updated metrics to tell us how successful companies are (or aren’t) at creating long-term prosperity for all their stakeholders.

Moynihan’s work resulted in a comprehensive framework for measuring stakeholder capitalism that includes metrics for diversity and inclusion, pay equality, and wage levels. It is a historic first step, and we must not stop there. Next, we need to apply an intersectional lens (gender plus race/ethnicity) to the metrics. Because if we view the common metrics through a singular lens – either gender or race/ethnicity – then black, indigenous, and other women of color (BIPOC) become invisible.

For example, by August of 2020, white women had recovered 61% of jobs lost in 2020. Black women, however, had recovered only 39% of jobs. Had we not disaggregated this data by gender and race/ethnicity, we wouldn’t have seen this disparity. As such, we wouldn’t have had an accurate representation of how the business community and economy at large is working for different segments of the population. It’s not enough to disaggregate data by gender only or by race and ethnicity only. Doing so makes blind spots out of BIPOC women – who, by the way, have been earning much less than their white female counterparts for years now.

A commitment to common metrics is the first step, implementing them is the second

Committing to an intersectional common metrics framework is one task. Implementing the commitment into business strategy is another. To make good on commitments to stakeholder capitalism, companies must embrace the arrival of the Fourth Industrial Revolution. Advanced technologies such as machine learning and cloud computing are necessary to help companies ascertain progress towards their goals.

What’s the World Economic Forum doing about the gender gap?

The World Economic Forum has been measuring gender gaps since 2006 in the annual Global Gender Gap Report.

The Global Gender Gap Report tracks progress towards closing gender gaps on a national level. To turn these insights into concrete action and national progress, we have developed the Closing the Gender Gap Accelerators model for public private collaboration.

These accelerators have been convened in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Panama and Peru in partnership with the InterAmerican Development Bank.

In 2019 Egypt became the first country in the Middle East and Africa to launch a Closing the Gender Gap Accelerator. While more women than men are now enrolled in university, women represent only a little over a third of professional and technical workers in Egypt. Women who are in the workforce are also less likely to be paid the same as their male colleagues for equivalent work or to reach senior management roles. https://platform.twitter.com/embed/index.html?dnt=false&embedId=twitter-widget-0&frame=false&hideCard=false&hideThread=false&id=1206990289602301952&lang=en&origin=https%3A%2F%2Fwww.weforum.org%2Fagenda%2F2021%2F02%2Fmeasure-stakeholder-capitalism-determine-recovery%2F&theme=light&widgetsVersion=ed20a2b%3A1601588405575&width=550px

France has become the second G20 country to launch a Gender Gap Accelerator, signalling that developed economies are also playing an important role in spearheading this approach to closing the gender gap.

In these countries CEOs and ministers are working together in a three-year time frame on policies that help to further close the economic gender gaps in their countries. This includes extended parental leave, subsidized childcare and removing unconscious bias in recruitment, retention and promotion practices.

If you are a business in one of the Closing the Gender Gap Accelerator countries you can join the local membership base.

If you are a business or government in a country where we currently do not have a Closing the Gender Gap Accelerator you can reach out to us to explore opportunities for setting one up.

Not only can tech-driven solutions collect, organize, and analyze vast amounts of intersectional data across an entire organization, they can also detect and mitigate biases that inevitably affect the wellbeing of their employee stakeholders. Companies make three key talent decisions every year: how much will we pay people, how will we evaluate their performance, and how will we determine their potential? For the average Fortune 500 company with 60,000 employees, that’s 180,000 opportunities to move towards stakeholder capitalism every year. Advanced technologies can ensure each of those 180,000 decisions is both an equitable decision and one made in the company’s best interest.

Towards a more equitable form of capitalism

The Davos Dialogues launch early this year. My ask is that when key global leaders share their views on the state of the economy in 2021, they ensure it’s through an intersectional gender equity lens. It’s no longer optional to report on stakeholder capitalism metrics, it’s required for our economic recovery. This is our moment to be bold, to build back better, and to embrace the Great Reset as a catalyst to bend the arc of history towards inclusion.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

THE ROAD TO GANESHA

At Davos, UN chief urges ‘big emitters’ to take climate action

In Bahrain, Global Forum for Entrepreneurs and Investment examines empowerment of women, youth through innovation

UN chief hails victory of ‘political will’ in historic Republic of North Macedonia accord

COP21 Breaking News_05 December: UN Secretary-General Announces “Climate Action 2016” Partnership

‘Repeated attacks’ could close down key hospital in eastern Libya, says WHO

UN chief highlights action across borders for ‘stable and prosperous Eurasia’

Half the world’s population is still offline. Here’s why that matters

Here’s why China’s trade deal with Mauritius matters

Bangladesh, South Africa and Bolivia all beat the US for women’s representation in politics

Climate change and its adverse impacts on health

Autonomous vehicles could clog city centres: a lesson from Boston

Speeches of Vice Premier LIU He and Vice President of the European Commission Jyrki Katainen at the Press Conference of the Seventh China-EU High-level Economic and Trade Dialogue

Time to make a fundamental choice about the future of healthcare

Thinking throughout HIV: changing a perspective

OECD Steel Committee concerned about excess capacity in steel sector

Building a European Health Union: Stronger crisis preparedness and response for Europe

4 rules to stop governments misusing COVID-19 tech after the crisis

Syrian Government’s ‘different understanding’ of UN role, a ‘very serious challenge’ – Special Envoy

Illicit trade endangers the environment, the law and the SDGs. We need a global response

LGBTQ+: The social evolution of a minority

Seaweed, enzymes and compostable cups: Can ‘Big Food’ take on plastic and win?

Coronavirus: the Commission mobilises all of its resources to protect lives and livelihoods

The EU prepares for the end of LIBOR: the Commission welcomes the agreement reached between the European Parliament and the Council on financial benchmarks

Our healthcare systems are ailing. Here’s how to make them better

Hiring more female leaders is good for profits. Here’s the evidence

Which countries get the most sleep – and how much do we really need?

Cancer research put at risk by General Data Protection Regulation? The possible dangers of a data privacy EU mania

Finland has just published everyone’s taxes on ‘National Jealousy Day’

Fighting against the Public Health System dismantling means guaranteeing assistance to all

8th Euronest Assembly: the future of relations with Eastern partners

Germany may prove right rejecting Commission’s bank resolution scheme

Parliament criticises Council’s rejection of money laundering blacklist

Revamp collective bargaining to prevent rising labour market inequalities in rapidly changing world of work

Summer pause gives time to rethink Eurozone’s problems

China in my eyes

Why 2020 will see the birth of the ‘trust economy’

Costa Rica is one of the world’s happiest countries. Here’s what it does differently

Providing mental health during pandemic times

Four ways Artificial Intelligence can make healthcare more efficient and affordable

Closing the gaps in accelerating women’s rights: the role of medical students

Does Draghi have another ace up his sleeve given his Quantitative Easing failure?

Youth Internationalization: part of everyday life in JADE

The link between air pollution and COVID-19 deaths

Execution of juvenile offender in Iran ‘deeply distressing’ – UN rights chief

Protecting farmers and quality products: vote on EU farm policy reform plans

What’s needed to ensure maternal health for women in vulnerable populations

Historical success for the First ever European Presidential Debate

Trump declares emergency and WHO urges speed – latest coronavirus updates

Joint U.S.-EU Statement following President Juncker’s visit to the White House

10 months were not enough for the EU to save the environment but 2 days are

European Junior Enterprises to address the significant skills mismatch in the EU between school and employment

Schools must look to the future when connecting students to the internet

The European Sting’s 2018 in most critical review

Mental health in midst of a pandemic: can we help?

EU ready to relinquish its internal tax havens

Why youth unemployment is so difficult to counter

‘Maintain calm’ and ‘exercise patience’ UN envoy urges, as Nigeria heads to polls

Why the 21st century’s biggest health challenge is our shared responsibility

Eurozone: Negative statistics bring deflation and recession closer

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s