According to a recent poll of over 1800 American adults by Pew Research Centre, most Americans now find women indistinguishable from men on key leadership traits such as intelligence and capacity for innovation, with many saying they’re stronger than men in terms of being compassionate and organized leaders. While that’s a sign of progress, what’s most interesting is instead of blaming that old chestnut of ‘work/life balance issues’, the highest proportion (about four-in-ten Americans) point to a double standard for women seeking to climb to the highest levels of either politics or business, where they have to do more than their male counterparts to prove themselves. Recognition of this double standard is a big shift and a much needed turning point. It’s perhaps not surprising about two-thirds (65%) of women say their gender faces at least some discrimination in society today, compared with 48% of men who believe women face some discrimination, but it’s promising that nearly half of men agree. Historically, it’s been convenient to blame women’s reproductive choices for the lack of progress. This research suggests that if both women and men understand the system is biased enables us to make inroads into this issue.
According to a recent poll on Women in Leadership of over 1800 American adults by Pew Research Centre most Americans now find women indistinguishable from men on key leadership traits such as intelligence and capacity for innovation, with many saying they’re stronger than men in terms of being compassionate and organized leaders. More specifically, a disproportionate number of Americans think that women in business are more likely to be honest and ethical, mentor junior staff and provide fair pay and benefits, than their male counterparts. On the other hand, men were seen to be stronger on negotiating profitable deals and risk-taking.
Nearly 40% of Americans say having more women in top leadership positions in business and government would do a lot to improve the quality of life for all women. An additional 40% of women say this would have at least some positive impact on all women’s lives. For their part, men are less convinced that female leadership has such wide-ranging benefits. Only 19% of men say having more women in top leadership positions would do a lot to improve all women’s lives, while 43% say this would improve women’s lives somewhat.
Who hasn’t worked with a diabolical boss? It’s often said that people don’t leave companies, they leave bosses. Terrible managers have a trickle-down effect: they bring down the quality of employees’ work and the bottom line with them. Lower retention rates, higher stress levels and low productivity can all be traced back to the bad boss. Getting more women on boards could be a solution to this problem.
A study conducted at Canada’s McMaster University surveyed 600 board members of which 75% were male. The women directors consistently outperformed their male colleagues in fairer decision making. They were also prepared to use more initiative in challenging situations. Also, it was reported in the Telegraph in ‘Women make better bosses than men‘, that companies with few female directors may actually be short-changing their investors.
Using some reality checks from this onlinemba.com video on bad bosses, we at Female Breadwinners show how women board members are truly beneficial for your business.
Benefit 1: Women executives build better workplace relationships
Fake sick days, dawdling because of low-motivation, and purposefully making mistakes out of spite are all direct results of a failed manager-worker relationship. Recruitment and new-hire training expenditure and in worst case scenario legal fees are all tangible costs of bad managers. People who are stuck working for difficult managers are more susceptible to illness, adding to the health costs of a company. Lost productivity cost the American economy $360 billion in the past year. Better relationships between employees and bosses would no doubt diminish the number of sick days and improve productivity.
Benefit 2: Women executives reduce company expenditure
Women directors tend to use cooperation, collaboration and consensus-building more often – and more effectively. Women also tend to consult others in the decision-making process, leading to a more cooperative feeling in the firm. After all, we do work harder for people we like and who ‘get’ us. Having just one woman on board cuts the risk of bankruptcy by 20 per cent (Wilson, 2009). Moreover, inclusive teams perform better during financial crisis.
Benefit 3: Women executives make better decisions
Female directors are more likely to ask questions rather than nodding through decisions (Konrad et al., 2008). They are also more inclined to make decisions by taking the interests of multiple stakeholders into account. At the board level, where directors are compelled to act in the best interest of the corporation, this quality makes women more effective corporate directors. George McQueen, the professor leading the Canadian study cited above also confirmed “Women seem to be predisposed to be more inquisitive and to see more possible solutions. Men [in the research] were more likely to take decisions based on rules, regulations and traditional methods. Women, however, were more likely to try new ways and ‘more prepared to rock the boat’”
Any of these are reasons enough to look at your gender diversity programme as an investment, rather than as a cost. By spending more on building an inclusive leadership team, you would actually be cutting costs in the long term.
Women now account for 17 per cent of all board directorships in FTSE 100 companies a figure that has not shifted in the last year at all. This lack of progress over the last 18 months is dismal, considering all the attention and supposed ‘good intentions’ of major businesses on this issue. New research, published by Cranfield School of Management reported that although the 17% is an improvement from 11 per cent in 2010, seven of the UK’s top 100 companies still do not have any female directors on their board. And it is still well below the target recommended by former banker Lord Davies in his government-commissioned report into women on boards, which called for the boards of the UK’s FTSE 100 businesses to be made up of at least 25 per cent women by 2015.
Have businesses reached a saturation point of interest on this issue? Of Britain’s largest firms, Burberry leads the way when it comes to female board appointments with three female directors out of eight on its board. Perhaps not surprisingly, it is led by a woman, Angela Ahrendts one of the few female CEO’s in a large UK company. British drinks giant Diageo is next, with four directors out of 11 on its board. In joint third position is outsourcing group Capita, GlaxoSmithKline and investment company Standard Life with a third of women making up their boards.
On FTSE 250 boards, women account for 13 per cent of directorships, which is up from 7 per cent in 2010. There are now 183 FTSE 250 boards with female representation and, for the second year running, all male boards that are part of the FTSE 250 are in the minority.
Still, business secretary Vince Cable said he isn’t inclined to introduce compulsory targets. “The government continues to believe that a voluntary led approach is the best way forward.” But, he added: “Quotas are still a real possibility if we do not meet the target of 25 per cent of women on boards of FTSE companies by 2015.” Certainly in our experience, proactive companies are getting ahead of this issue by looking at organisational culture change and filling their pipeline of talent with women ready for Board level appointments in the next few years.
Quotas or proactivity on gender balance, it seems only time will tell.
I recently asked Helena Morrissey, CEO of Newton Investments and Founder of the 30% Club, what she felt should happen if the targets for women’s representation on FTSE100 Boards – 25% by 2015 go unmet. Based on the very slow progress on this issue in the UK, since The Lord Davies report came out in 2011, it’s not likely we’ll hit the target, giving rise to increased expectations for a European style quota. The 30% Club is anti-quota, based on a concern they are unmeritocratic – and as Ms. Morrissey said to the audience “I’m all for meritocracy, I just happen to think women are great.’
When I asked about unmet targets for women on boards, she remained optimistic. She reasoned that because there is such a groundswell of support and increasing interest on this topic, we will see a paradigm shift – albeit one that might not get us to the aforementioned targets by 2015. I feel that while I may not like quotas in theory, I like their results and do not see many better options to make the progress we expected by now. While she and I may differ on quotas if we fail to meet the targets, I do tremendously respect the work helping Chairmen and other senior leaders see this as a business issue.
Indeed, there is a paradigm shift going on, but I also believe leaders focus on metrics – and good intentions are not enough to sway action. New research from Thomson Reuters on ‘Mining the Metrics of Board Diversity’ speaks to this point. The research, written by Katharine Ramsden, and discussed by Kimberley Cole at the recent We Own It Summit, found that in 2012 just 59% of 4100 global public companies had even a single woman on their board, with just 17% reporting having 20% women or more. What is dispiriting is that this 59% is up just 3%, from 56% in 2008, before ‘Women on Boards’ was the hot topic it is now.
If those companies have improved by a mere 3% in the face of all the media attention this issue has garnered over the past 5 years, I’m not optimistic the current ‘groundswell’ will lead to sufficient change. There is a important difference between hand-wringing good intentions and real action. This survey also confirmed the finding we have seen elsewhere; that companies with no women on their boards, on average, under-performed relative to mixed boards. They also suffer from slightly higher tracking errors, indicating potentially more volatility. While the business case has been consistently made, we shall see which proactive leaders heed and act on the data.
When I work with Boards on how to do inclusive leadership better, I’m often met with one of two reactions. The first is that incorporating women is threatening when there are so few positions at the top anyway. The second is from more enlightened men who suddenly see how their businesses have been held back by only drawing on the talents of half of the population. With increased globalisation in the 21st century, we will all have to work with a larger proportion of people who are fundamentally different than us – which is a challenge for everyone. The first group of guys prefer to bury their heads in the sand to this challenge. But the second group get it – and understand that’s where their competitive advantage will come from if they manage well.
Take the example of Warren Buffet, CEO and Chairman of Berkshire Hathaway. In an exclusive article for the Fortune Magazine, Buffet recently spoke up for women in business – “America has forged this success while utilizing, in large part, only half of the country’s talent. For most of our history, women — whatever their abilities — have been relegated to the side-lines. Only in recent years have we begun to correct that problem.” In an interview with Pattie Sellers from Fortune Magazine, he asked women to give up their self-limiting beliefs and aim for the top. His company bought on a third woman director on board, clearly recognizing that gender diversity means more success.
Gender diversity faces resistance because some men find it difficult to look beyond their self-interests. After all, who wants to double the number of competitors for top positions? But worse, there can be a deeply engrained fear of a future world that is fundamentally different from the one in which we grew up. Inclusive leadership looks beyond these factors to a world where better results can be achieved when more people contribute to the economy.
No manager operates his or her plants at 80% efficiency when steps could be taken that would increase output. And no CEO wants male employees to be underutilized when improved training or working conditions would boost productivity. When obvious benefits flow from helping the male component of the workforce achieve its potential, why in the world wouldn’t you want to include its counterpart? As Warren Buffet put it; we are all operating on ‘half-capacity’ when we don’t fully integrate the talents of women.