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| Mensuel : | Edition de novembre 2010 |
| Rubrique : | Emploi/Pension |
| Titre : | More women on executive boards – Why ? |
| Article : | Recently the European Commission has warned companies that if they do not move voluntarily to ensure gender balance on executive boards, it will force them to. The enforcement of the quota system introduced in Spain and Germany, even though efficient in these countries, seems not to be popular in Luxembourg where the Minister for Equal Chances is openly against such practice. Most of us prefer that businesses develop their own cultures, processes and systems naturally, in order to become fully gender balanced. However, it was estimated that, if no special measures are taken by companies or governments to ensure gender balance (at least one third of each gender, male or female) it would take another 60 years for women to be equally represented at the top level.
Gender balance in the business world is however a necessity and a strategic issue as the largest growing economic force in the world is not China or India, but women! A Harvard Business Review article published in 2009 in the context of the financial crisis also recommended this approach: “A focus on women as a target market – instead of on any geographical market – will up a company’s odds of success when the recovery begins. Understanding and meeting women’s needs will be essential to rebuilding the economy; therein lies the key to breakout growth, loyalty, and market share.”(1) Companies not only need to understand women, who are responsible for about 80 percent of the consumer goods purchasing decisions, but they also must attract, recruit and retain the majority of the newly educated talent of the world: in Europe women earn 59% of university diplomas and 61% of PhD degrees. In addition, research clearly shows that European companies with 3 or more women in senior management scored higher on average for each organisation criterion than those companies with no women at the top. There is also likely to be a correlation between the number of women in leadership and good financial performance, namely 11,4% return on equity compared with an average of 10,3%, EBIT operating result of 11,1% against an average of 5,8%, and stock price growth of 64% against the average of 47% over the period 2005-2007.(2) We hear almost on a daily basis about the equal opportunities which are being offered to men and women with no discrimination in favour of either gender, but purely based on meritocracy. We can not stop asking ourselves though, how it is possible that these so called meritocratic systems constantly promote a majority of men at the top leadership positions? Some elements need to be mentioned: 1. Men are running most organisations today, and are usually 70% and often 100% of the leadership. Selection and career advancement criteria have been requiring conforming to a masculine norm of long hours, endless travel and office politics. 2. The careers of women are not as linear as men’s. Indeed, the age at which employees are identified as high potentials for leadership roles is between 30 and 35 years old, which is also the age at which women usually start their family lives and have their first child. In addition, other obstacles seem to exist for women career advancement: mental barriers, prejudices towards the role of women in society, opposition or resistance to female leadership styles, unequal access opportunities to entry and mid-level positions, etc. 3. The qualities which are important for an entry job and middle management versus a top leadership position are different. Women tend to think that if they work hard, have technical competence and control they will naturally be promoted. The appointment to leadership positions is however not only based on job performance, but also largely on self-promotion, making achievements visible, expressing ambition, pursuing power, and participation in informal networks. These rules are unwritten and the information is generally passed on orally through networks and informal mentoring relationships, which women usually miss because of their limited time involved in company politics. Women normally also avoid getting involved in informal discussions and meetings before or after work, when they are usually busy with family responsibilities and their relative modesty (in communication terms) is rarely seen positively, and actually is interpreted as lack of leadership, vision or charisma.(3) Gender balance in organisations is not just a women’s issue, but a general business and strategic issue which needs to be approached by companies just as any target market. It’s not the women who need to be “fixed”; the organisations and society need to adapt to the new macroeconomics, including demographic, cultural and education changes. Creating internal women’s networks is not enough, and even appointing one woman in the senior management will not change the situation as research has shown that it takes a critical mass, around 30% of women on a top leadership team for the impact to be felt on performance.(4) To finish on a positive note, I am happy to let you know that in order to help companies improve their gender balance at the top level, a list of highly skilled and experienced women from different European countries is being produced in Luxembourg, which companies will be able to get access to as of March 1st 2011, and use when selecting and appointing women for their independent administrator positions. Clara Moraru Want to know more? Order your copy of the book on www.women-leaders.eu Contact Clara Moraru on info@women-leaders.eu 1) Silverstein, M J and Sayre, K, The Female Economy, Harvard Business Review, September 2009 2) McKinsey & Co (2007) Women matter: Gender diversity, a corporate performance driver 3) Wittenberg-Cox, Avivah – How Women Mean Business, Wiley, 2010 4) McKinsey & Co (2008) Women matter: Female leadership, a corporate performance driver |
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