It's been just over a year since we launched the Business and Society Blog, and the last 12 months have seen what could be a seismic shift in the way we think about gender parity. From the BBC gender pay gap to #MeToo and #TimesUp, there is now a global momentum striving for change. That's why on the blog this month - the month that includes International Women's Day and Mother's Day - we are focusing on women. Women as CSR scholars, women in leadership, women as carers, women as consumers - we are sharing our research and thinking on how we can continue to #PressforProgress. In this post, CBOS Deputy Director Johanne Grosvold reflects on what progress has been made for women in business leadership, and what we might need to do next.
Fifteen years ago this year, Ansgar Gabrielsen, the then Conservative Norwegian minister for Trade and Industry announced that he was “fed up with the old boys network” running Norwegian business, and that he would take drastic measures to change the gender balance of Norwegian corporate boards. And so he did. The Norwegian parliament passed a quota law requiring all publicly listed firms to have at least 40% of each gender represented on firms’ highest decision making body. To ensure compliance, the state threatened to forcefully dissolve the firm in the event of non-compliance. Unsurprisingly, Norwegian boardrooms have been the most gender diverse ever since.
The lengths to which the Norwegian government was prepared to go to champion greater female executive involvement surprised and delighted in equal measure internationally. Whilst countries such as Germany and France decided to follow Norway’s lead and similarly introduce legislative measures for female board representation, other countries - including the UK - decided against legislation, instead encouraging firm’s to meet voluntary targets. Across Europe, those countries that decided against the introduction of legislative measures to redress board gender balance saw an increase in board gender diversity over the 2010-2016 period roughly half of that observed by countries who did introduce some form of legislation. Thus whether by legislative force, encouragement, or other forms of institutional pressure, women now occupy a larger number of the seats around the boardroom table across most of Europe than they did 15 years ago. And although the debate around corporate board gender diversity see little sign of abating, there is increasingly evidence showing that on balance, gender diversity improves the board’s ability to do its job, that of monitoring the firm’s management.
Ironically, firm’s management remains overwhelmingly male dominated. Across the EU, only 5.7% of CEOs are women, whilst in the UK 15 CEOs out of the FTSE 350, or 4.7% are women. The glass ceiling to the corporate boardroom might have cracked, if not exactly shattered, and some countries are now approaching 50% female corporate board representation. But reaching the upper echelons of management remains a challenge for women, who instead find the lower rungs of the corporate ladder rather sticky. And this is irrespective of what means were adopted to improve the board gender balance in the first place. In other words, legislative interventions for board gender diversity do not appear to have had much of a knock-on impact on corporate leadership diversity, nor have voluntary targets.
The next frontier in corporate leadership thus seems to be how to get women into meaningful leadership positions. The Hampton-Alexander Review, which sought to analyse the gender balance in FTSE leadership, concluded that work towards more gender diverse leadership must now focus on the executive leadership pipeline. Such a focus, however, requires answers to key questions around women’s career advancement, career aspirations, family-work life balance, attitudes to risk, and motivation. For despite much debate, research, rumination and column inches being taken up with pros and cons of women and leadership, we don’t know all that much about whether women want to lead, how they view their chances of leadership positions, or what sort of leaders they want to be. All we really know is that currently women are not, in the main, in corporate leadership positions, and this limits the potential of society. As Michelle Obama said, “No country can ever truly flourish if it stifles the potential of its women and deprives itself of the contributions of half its citizens” .
The UK government’s decision to comprehensively map the state of UK PLC’s leadership team diversity through the Hampton-Alexander review was an important step, heralding the possibility of similar success in promoting gender equality in the management team as well as the board. Pioneering women such as Dame Helena Morrissey, Head of Personal Investing at Legal and General, and Carolyn McCall, the first female Chief Executive at ITV have shown that it is possible for women to beat a path to the executive suite. The challenge now is to build on this progress and make the executive suite the natural home for both women and men.