You would think it would be an easy sell. There is clearly a correlation between women in executive suites and on corporate boards and higher returns. When women serve on corporate boards, profits and productivity increase. Diversity of perspective and experience create better decisions, rigorously tested judgments, and high quality "thought capital". The benefits of inclusion extend beyond monetary outcomes, however, and also translate to lower turnover, better recruitment, and easier access to a greater range of markets. In all the ways it can be measured, it's a win-win-win.
If all decisions were based on logic, fact, and merit, women's representation in business would be stepping up at a brisk pace. Yet this is simply not so, not around the world, and certainly not in the US. Women are charging out of American business schools, earning more MBA's than men, but never going the distance in anything even remotely close to the same numbers as men. A pitiful 4% of Fortune 500 CEO's are women. Only 16.6% of corporate board seats are occupied by women, and 27% of Fortune 500 companies have no women executives AT ALL. It is no surprise, then, that the US ranks well behind much of the world in terms of women's representation in senior management, with a figure of just 17%.
What countries do you think have managed to move more women up the corporate ladder?
The International Business Report of 2012 from Grant Thornton puts the US in context and looks at women's corporate leadership around the world. Russia sits at the top of the list with women comprising 46% of senior management posts. France, Spain, Sweden and Finland are in the top 25, as well as Australia, New Zealand, and the United Kingdom. Perhaps less expected, Botswana, Thailand, and the Philippines are near the top, each with 39% women's representation, more than twice that of the US. Even Canada, a country with which we share much in common, soundly beats us with a figure of 25%.
It's hard to explain such a mismatch between the candidate pool of at least 50% female MBA's and their disproportionate absence in the higher levels of the profession. They took the same courses, got the same or better grades, and graduated with identical degrees to those of their male counterparts. And then they disappeared, probably for a variety of reasons and a wide range of differing circumstances. Whatever is going on, it creates serious inefficiencies if most of the trained female talent never makes it to a place of influence and policy-making, or to a point where their presence is reflected in the higher productivity and profit they can bring. The potential has not been realized for the individual, the household for which she provides, for the business community to which she contributes, or the tax base of which she is a part.
It was long thought that with enough time, women would naturally assume a greater share of leadership positions, as their education and experience caught up with men's. But it has not happened, in spite of women's demonstrated success in admission to and graduation from our best colleges and universities. The organic approach must be replaced with a more progressive method of female empowerment. Some countries have set targets for gender parity on corporate boards, or required businesses to disclose the proportion of women so serving. Spain passed a law in 2007 compelling businesses with at least 250 employees to reach 40% female board representation by 2015. The UK set a more modest target, 25% women's representation on boards of their 100 biggest companies by 2015. Could the US follow suit?
Whether voluntary or mandatory, identifying a quota target will certainly cause many to contend that a women gained a position merely because of her gender. Affirmative action continues to be a lightning rod for controversy in this country, and engenders suspicion and doubt. I don't think this is the only logical conclusion to draw, however. We must admit that even when presented with qualified candidates from both genders, most men tend to select and promote men. For that matter, most women tend to select and promote men. We are so used to seeing leadership, ambition, power and success look male in character and attributes that we continue to reinforce that image. It is in a variety of small interactions and subconscious distinctions that the status quo is replicated even when the underlying facts reveal dramatic shifts. If we can't change our perceptions by changing our reality and putting qualified women in positions of power, what happens when other countries bold enough to do so are able to leverage the opportunity of the female portion of their talent pool? Will we fall even farther behind?
However we decide to proceed, we must change our current practice. Turning out class after class, decade after decade, of qualified women is not moving us anywhere close to gender parity. As we fail to leverage our female talent, other countries are moving ahead. For the moment, it's mostly the individual women paying the price. But it won't be long until our economic competitiveness and national security start suffering at our inability to get ahead of the curve and change with the times.
'Til next time,
Your (Wo)Man in Washington
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