Where are all the female CEOS and what barriers prevent women from reaching senior leadership roles and the boardroom? Gender inequality in the workplace is not just a social or legal issue – it is an important business one too, so how are companies performing on this critical aspect of 21st century management?
Traditionally data has shown that from leadership positions to pay and investments, women are systematically losing out, and less than 30% of senior management roles are held by women across the globe. Furthermore, statistics reveal that while women make up 52% of the population, only 15% of employees in the IT sector are female, and in science, women are also in the minority. Likewise, less than 30% of the world’s researchers are women and this under-representation occurs in every region in the world. The financial sector is no different. It has traditionally boasted a male-dominated leadership, culture and reputation, and while many companies are adjusting to the increasing financial power and influence of women, ingrained attitudes take time to change. The old boy network may not be quite as explicit as it once was, but it continues to exist and permeate many organisations.
However, last year 87% of global businesses had at least one woman in a senior management role and today women lead 167 of the country’s top 3,000 companies. Currently, 7% of FTSE 100 companies have a female CEO at the helm of the organization, and while FTSE 250 companies have fewer female CEOs, with just five companies with a woman at the head of the business, progress is visible. Nevertheless, according to research by the International Labour Organization (ILO), over 13% of boards do not have a single woman involved and the majority have low female representation. Clearly a balance has not yet been reached and there is more work to be done.
However, recent data from the Hampton-Alexander Review shows women now make up 33% of all board positions on FTSE 100 companies compared to 12.5% a decade ago, but to foster legitimate inclusivity, companies must make meaningful cultural change. Although more women are rising to lead organisations, they often face challenges not typically shared by their male counterparts,
including the often stronger obligation to sustain a work-life-childcare balance, sexual harassment and a lack of role models at the top of the corporate layer. Things are looking up however as recent legislative efforts and initiatives have helped bring women’s representation in the boardroom to an all-time high, but as it stands approximately 90% of the world’s board seats still belong to men.
We are witnessing change across the pond too. Under Californian law, publicly-held companies are required to have at least one female board director. While women have made notable gains politically, they continue to struggle to gain economic equality, including at the highest levels of American business. Fundamentally, this isn’t a women-only issue and it cannot be seen as merely a tick box initiative. There needs to be a united drive towards diversity and inclusivity, as gender equality in the workplace is a vital ingredient to reach sustainable development goals. Achieving this can help introduce a fresh perspective, encourage innovative solutions to problems and boost corporate performance overall.
The United Nations Global Compact Network has launched Target Gender Equality, a new initiative to mobilise and support companies in meeting ambitious corporate targets for women’s representation and leadership in business. It hopes to empower more women in the industry, drive the next generation of leaders and inspire companies to build a sustainable gender balance in the boardroom.
The case to increase female leadership is not just about reaching gender equality, it is also good business. Women occupying leadership positions can be a competitive advantage. It’s not surprising that the recent ILO study revealed that when boardrooms are 30-39% women, enterprises are 18.5% more likely to have improved business outcomes, and when boardrooms are gender-balanced, enterprises are 20% more likely to have improved business outcomes. The proof is the percentage and the business case for gender diversity in the boardroom is clear. A more diverse C-suite is connected to higher margins, bigger profits, and a better total return to shareholders. Measuring women’s progress and understanding their positive impact in corporate leadership is vital and it should serve as a wake-up call to business leaders.
Diageo, a leader in beverage alcohol, has been ranked as the number one business globally for gender equality in the Equileap 2019 Global Gender Equality Report and Ranking, which covers 3,519 companies in 23 developed economies, representing 98 million employees. Diageo boasts huge inclusivity, and almost half (44%) of Diageo’s board members are women. The company is working towards a senior leadership team showcasing 40% female participation by 2025. There is progress, but it is slow, and while establishments are moving in a positive direction, the pace of change is more generational and less powerful than it could be. When all of the talent pool is given the opportunity to rise, companies benefit as well as the individuals.
In 2020, the workforce should mirror the diverse world we live in, and women like Sharon Letcher, an entrepreneur, international speaker, best-selling author, mentor, philanthropist, licensed CPA and a Chartered Global Management Accountant, is paving the way for female leaders. Inspired business leaders can reset the tone at the top and make gender parity a priority throughout the entire organisation, and this change will be good for business and good for profit.
A willingness to change the traditional corporate culture creates a ripple effect that benefits ourselves, our fellow workers, our organisations, and can lead to a shift in society as a whole. Companies that make the switch from the old command and control management models to a business that is more collaborative and inclusive, is set to thrive. At a time when the world is facing huge uncertainty, this has never been so important.
