Diversity is a hot topic and a major challenge in many corporations. More women are entering the workforce around the world, but let’s take a closer look at how senior women are faring in business.
Women Board Members
- More women directors are sitting on corporate boards. Large multi-country studies show women hold 12%-15% of board seats overall, but only 1-4% of women hold leading chair seats on boards. So they are in the boardroom but seldom in charge.
- Some European countries have quotas for women board members, ranging from 30-40%, which is one reason for their increased number on boards.
- Within 5 years, more than 12 countries set similar quotas, mainly in Western Europe. Some governments set penalties for non-compliance -– others set soft-law quotas or guidelines.
- Some quota fears were never realized:
- 1) the fear that a scarcity of qualified women would mean individual women would end up sitting on too many boards but ‘overboarding’ did not occur (19% of European women sit on 3 boards versus 15% of men);
- 2) the fear that professionals on boards would be replaced by token women, which did not happen although some women directors are younger and less experienced.
- There were mixed results from Board Gender Quotas
- A shortage of qualified women in Germany led to more foreign board members.
- Results of company performance are inconclusive (positive, negative, no effect) according to some reports. Multiple factors influence performance.
- Decision-making processes changed due to having new members, but the content of their decisions has not changed.
- Women board members have not resulted in promotions of women at lower levels of corporate hierarchy. Wages increased for women directors but not for other women.
Women at the Top of Companies
- Significantly more businesses (75% in 2018 versus 66% in 2017) now have at least one woman on the senior management team, but the proportion of the team that is female has slipped from 25% to 24%.
- Most women in business lead family enterprises or their own entrepreneurial enterprises, thereby encountering fewer gender-related barriers.
- In 2018, the United States has less than 24 female CEOs, but this is a decrease from 32 (8%) in 2017. Women in the UK hold 6% of CEO jobs, while France and Germany have 2% and Norway has 7%.
- Research reveals that introducing policies alone is not enough to drive real progress. We need a wider culture of inclusion championed from the top to create real change.
Why Promote Women? What is the Business Case for Women Leaders?
- Fortune 1000 companies led by women outperformed the S&P 500 by 226 percent between 2002 and 2014 and had better work environments.
- Female leaders are associated with greater tolerance for diversity, higher individual empowerment, and real/expected economic growth, mitigating the negative effects of diversity for minorities (Perkins, Cho, Phillips, Toosi, 2018)
Why should society care about women’s equality?
- McKinsey (Schwab, et al. 2016) calculates that advancing women’s equality can add $12 trillion to global growth
- Failure to utilize women’s capacity fails to take advantage of their families’ and nation’s investment in their education.
- When women work in safe, fair environments and are part of the political process, not only their household but also society improves (UNICEF State of World’s Children, 2007).
- If nothing is done to promote equity, men and women will not have gender equality (in health, education, economics, and politics for 170 years. (WEF, 2016)
Lastly, there were no gender differences found in large-scale studies of global managers
- Anupam & Rook (2014) found no gender differences in 360 evaluations with the GELI instrument, but women’s self-reports were lower. Men generally tend to rate themselves higher than women do.
- Winsborough & Hogan (2014) found no significant gender differences in global managers, using the Hogan Personality Inventory.
- But gender research still finds that women and men are perceived differently due to gender roles and stereotypes, which can influence their perceived effectiveness.
In our own universal measure of global competence across all types of difference and diversity, the Global Competency inventory (GCI), we found no significant gender differences in a database of over 90,000 people from all over the world. To find out more about the GCI, or how the Kozai Group can help your organization, please reach out to us at the Kozai Group.