Newer markets racing ahead with more women at executive level

A recent TIMESONLINE article has highlighted the need for more diversity in the workplace. According to the article, the chief executives of the UK’s major banking groups are men. “There’s Sir Fred Goodwin, the former RBS chief executive, who walked away from his still steaming mess with a £2.7m lump sum and £340,000 annual pension; Sir Tom McKillop, also former RBS; Sir Victor Blank, former chairman of Lloyds Banking Group; Eric Daniels, the Lloyds chief executive. But can you name any woman?”

The 2009 Female FTSE Report shows that there are just four female chief executives. Worse still, 113 women currently hold 131 FTSE 100 directorships, compared with 834 men that hold 947. In America, women make up just 15% of company boards.

A recent research by Leeds University Business School, which studied 17,000 companies that closed in 2008, found that businesses with at least one woman on their board were 20% less likely to go bankrupt. Harriet Harman, the equality minister, said: “Businesses that run on the basis of an old boys’ network and do not draw on the talents of all the population will not be the ones that flourish and prosper in the 21st century.” The admission by the Government Equalities Office that it could take 60 years before men and women were equally represented at board level, based on the current rate of change is very interesting.

According to the article, much newer markets than ours in the West recognise women’s potential at board level. Data from the World Economic Forum suggest that the Bric countries — Brazil, Russia, India, China — with emerging economies are changing faster than London and New York when it comes to employing women at executive level. Brazil can boast that 11% of its chief executives are women. India is racing ahead, especially in the financial services sector. RBS, UBS, HSBC and JP Morgan Chase in India are all run by women; so is ICICI Bank, the country’s largest private lender. Half the deputy governors at the Reserve Bank of India are women and last year Shikha Sharma was appointed managing director of Axis Bank, the country’s third largest lender.

The article asks the question which is surely on the lips of many diversity campaigners: “Why, in a country where overall female literacy rates are poor, are so many more women making it to the top? While in Britain, with 30,000 more female undergraduates than male ones, women have not muscled into the banking boardroom".

Women are surely less likely to enter an industry if they know it will present them with a glass ceiling. And it seems some women are realising they just can’t have it all. Isobel Rimmer, founder of Women on Board explains that “Some women don’t want to get to that level in the first place. By definition we are talking about high-potential, high-achieving women and they aren’t willing to underachieve either at work or at home. If either family or career must take a knock to bolster the other, they’d rather opt out of promotion altogether.” A study from the US-based Center for Work-Life Policy (CWLP), to be released in May, will argue that the social and cultural traits of Bric countries play a large part in their women’s ability to run both companies and families successfully. Sylvia Ann Hewlett, the author of the report, says: “The thing that knocks career women off track is still the daycare nightmare. In countries with massive amounts of extended family and cheap domestic labour, childcare is not an issue. We found that 80% of women were able to lean on their extended families. That puts them ahead of British and American women.”

In India, almost a third of the working population live with parents or in-laws. The US figure is 3% and in Britain it’s 1%. Hewlett has discovered a profound difference between dropping children off at nursery and leaving them at home with granny: “We’ve found evidence that maternal guilt is comparatively low in Bric countries. If you suddenly have to take a business trip, there’s no problem.”

In response to last week’s government equality survey, Gordon Brown asked the Financial Reporting Council to consider including a new principle in its code of conduct requiring firms to report on their actions to increase female representation on boards, but announced that he would not be introducing “affirmative action” quotas, as countries such as Norway have.
Read the full article here.