Companies faltering over women in leadership positions

Recent Employment Equity Reports show that in South Africa, between 2005 and 2014, women in top management increased from 17% to 21%, while women in senior management increased from 24% to 32%.

"A positive development is the increase of female professionals from 33% to 43%, and of skilled technical workers from 43% to 45%, since this provides a pipeline of qualified women for future advancement," says Sandra Burmeister, CEO of executive search firm Amrop Landelahni.

"However, most of the progress took place in the mid-2000s. More recently, the pace of transformation has slowed. This is a major concern. Moreover, private companies trail government departments and state-owned entities markedly in female representation.

"Across all sectors, the fall-off in the proportion of women as they climb up the corporate ladder must be remedied. We need to plug the leaks at every level in the promotion pipeline."

South Africa doing better at equality

South Africa has done better than many other countries. Catalyst research estimates that women in public companies globally make up 24% of senior management. This mirrors the finding of a recent Grant Thornton Women in Business report covering private mid-market companies. According to the report, 22% of senior leadership roles globally are held by women, and close to one third of businesses have no female leaders.

"In public and private companies, progress has been alarming slow," says Burmeister. "The proportion of senior roles held by women has barely changed over the past decade. Despite calls for greater inclusion, abundant dialogue and increasing regulatory pressure, there has been little movement."

According to the Grant Thornton report: "Eastern Europe leads the way, and there has been some progress in Europe, but India and Germany remain towards the bottom of the ranking, trailed by Japan with only 8% of senior roles held by women.

"Little has changed in North America since 2004, with neither Canada (25%) nor the US (21%) showing significant progress. Despite the strong presence of female political leaders in South America the region has gone backwards (28% to 18%) since 2009. Both Australia and Singapore are on a par with the global average but have seen no improvement since 2004."

Women produce better financial results

"Research proves that companies with more women in senior leadership teams produce better financial results," says Burmeister. "Why then," she asks, "is the pace of change so slow?"

Several reasons can be advanced. "There is a cultural bias against women in many cultures, particularly in Asian and Latin countries," says Burmeister. "Markets have become more competitive globally. People are working harder and putting in longer hours as jobs are expanded to include more responsibilities. Women are at a disadvantage as they generally shoulder family responsibilities. They also tend to be concentrated in service industries and non-core jobs, and are the first to suffer retrenchments in an economic downturn.

"In the face of these obstacles, many women are leaving the corporate world to set up their own successful mid-sized businesses. They may well turn out to be the architects of gender empowerment for the future."

Multi-faceted approach needed

Burmeister believes that a multi-faceted approach is needed to improve the situation for women - by government, business and women themselves.

"While employment equity legislation has given a boost to gender parity in South Africa, research shows that few companies perform well on both ethnic and gender diversity," she says. "Government faces the challenge that the strong focus on black economic empowerment may well continue at the expense of gender empowerment, despite recent measures intended to address this.

"Corporates also have a huge role to play. The business case for diversity must be recognised and supported from the very top.

"A major shift by management is required. Let's not forget that the gender gap reflects the very real power that men wield in business. They, too, need to be engineers of change. Diversity should be positioned as integral to corporate performance, and treated in the same way as any other culture change initiative.

"Women themselves also need to make the shift. Whether working in corporations or running their own companies, women today have options, and can make their own choices. Successful women don't only do their current job well; they work from a strategic perspective and keep an eye on projects that will deliver long-term benefits to their own careers - and to their company.

"However, the fact that many individual countries and the European Union have introduced or recommended quotas demonstrates that voluntary efforts to boost gender equity are not gaining traction. There is a real risk that quotas - with all their attendant drawbacks - may remain the only option for achieving real change."

Sources:

1. Catalyst. Pyramid: Women in S&P 500 Companies. New York: Catalyst, April 3, 2015, www.catalyst.org/knowledge/women-sp-500-companies

2. Catalyst. Quick Take: Women in Management, Global Comparison. New York: Catalyst, 2014. www.catalyst.org/knowledge/women-management-global-comparison

3. Commission for Employment Equity Annual Report (14th), 2013-2014, Department of Labour, RSA, www.labour.gov.za/DOL/documents/annual-reports/

4. Commission for Employment Equity Annual Report (15th), 2014-2015, Department of Labour, RSA, www.labour.gov.za

5. Diversity Matters, McKinsey & Company, 2 February 2015, www.mckinsey.com/insights/organization/why_diversity_matters

6. Women in Business: The Path to Leadership, Grant Thornton International Business Report 2015, Grant Thornton, February 2015, www.grantthornton.global/insights/articles/women-in-business-2015/