24 May 2022
Econ 4.0: Getting more women into senior management
Here’s a fantastic fable with a fabulous twist: A husband and wife in their 60s find an antique oil lamp in their attic. A fairy spurts out from the spout when they rub the dust off. “You’ve released me from this curse,” the fairy proclaims in a grand gesture. “Therefore, I will grant you one wish each.”
The wife claps her hands. “I want to travel around the world on a luxury cruise ship with my darling husband,” she exclaims. “We could spend the rest of our lives peacefully together!” The fairy waves her hands, there is a puff of smoke — and two tickets for the next sailing magically appear and are presented to the delighted woman.
The husband frowns. “Sorry, my wish is to travel the world on a luxury cruise with a woman 30 years younger than me,” he says. “Can you please grant me my wish?” The fairy waves her hands, there is a puff of smoke — and the husband becomes 90 years old!
The moral of the story: Men should remember that fairies are female.
If that story made you blink, these statistics should make you think: In 2011, there were only a dozen women CEOs (2.4%) in the Fortune 500 list of companies; in 2020, there were 37 female CEOs (7.4%); and in 2021, that number rose to 41 (8.1%). There’s still a long way to go to achieve any semblance of gender parity.
Katharine Graham made history when she became the first female CEO of a Fortune 500 company; she began working at The Washington Post in 1938 and led the paper as CEO from 1963 until 1991. Carly Fiorina was the first woman to head a Fortune 50 entity when she became CEO of the Hewlett-Packard Co in 1999.
Ever since Covid-19 emerged, women have made some gains in senior management. But the pandemic continues to take a toll. The result? Women are now significantly more burnt out — more so than men, according to a study on Women in the Workplace by McKinsey published in September 2021.
“Despite added stress and exhaustion, women are rising to the moment as stronger leaders and taking on the extra work,” McKinsey notes. “Compared with men at the same level, women are doing more to support their teams to advance diversity, equity and inclusion. They are also more likely to be allies to women of colour.”
Despite that, this critical work is going unrecognised and unrewarded by most companies. “This will have implications,” McKinsey adds. “Companies risk losing the leaders they need right now, and it’s hard to imagine organisations navigating the pandemic and building inclusive workplaces if this work isn’t prioritised.”
Is the environment for women in the IT industry any better? Nope.
“Surrounded by C-level male executives and teams, women in IT face unique challenges,” states a Gartner report. “Among them, marginalising behaviour from peers, bias from others and self-limiting beliefs. IT is second to last in terms of the representation of women across corporate functions. Women make up only 26% of IT employees — and that number decreases across senior leadership ranks.”
The underlying concern? Many corporate leaders view this as a social problem — rather than a business issue.
“The irony is that IT organisations face pressure to deliver solutions quickly and with limited resources,” says Christie Struckman, a Gartner vice-president. “The answer is staring them right in the face — recruit and retain diverse talent. In fact, the benefits that diverse teams bring to an organisation, like increased innovation and the ability to resolve issues more quickly, could allow IT to work smarter.”
Hiring requirements for IT roles are also antiquated. “When presenting at IT conferences, I ask the audience who has a technical degree,” Struckman says. “Every time, less than half the audience raises their hand, revealing that many senior-most technical leaders come from non-technical backgrounds. This, combined with research that shows women tend to shy away from jobs they don’t believe they are 100% qualified for, suggests IT teams are artificially limiting their talent pool by recruiting against those outdated job descriptions.”
The problem starts at the lower rungs. McKinsey calls it a “broken rung” at the first step-up to a manager role where women are promoted to managerial positions at far lower rates than men. This makes it nearly impossible for companies to lay a foundation for sustained progress at more senior levels.
“For every 100 men promoted to manager, only 86 are women,” McKinsey notes. “As a result, men outnumber women significantly at the manager level, which means far fewer women to promote to higher levels. The broken rung likely explains why the representation of women at the senior manager, director and vice-president levels has improved more slowly than the pipeline overall.”
How can the “broken rung” syndrome be fixed? Start at the top and begin at the bottom. Malaysia, for example, has mandated that listed companies have at least one female director on their boards from next year. The proposal takes effect from September 2022 for large enterprises and June 2023 for all other listed firms.
Women make up 25% of the board of major public companies in Malaysia. However, 252 listed firms (27%) do not have a single female on their boards.
“Gender diversity does not mean having the token female so that you can tick a box”, Bloomberg quoted Nisha Sabanayagam, executive director of the All Women’s Action Society, as saying, “but, rather, understanding that having a balanced gender composition can ultimately contribute to more creativity and innovation. The government should have set a target of 30% women representation instead.”
Across the Causeway, women comprise 18% on boards of the largest companies listed on the Singapore Exchange. All statutory boards in Singapore have women on their board of directors, and two — Singapore Post Ltd and Far East Hospitality Trust — have women directors comprising half of their boards.
Singapore’s Ministry of Social and Family Development set up the Council for Board Diversity to promote a sustained increase in the number of women on boards of listed companies, statutory boards and non-profit organisations. The top 100 companies, with targets of 25% by 2025 and 30% by 2030, have already missed their 2020 target of 20%.
The intent is good, the goals are robust, but what could be the critical factor? On-the-job training. Companies are 18% more likely to send men on work-related training than they are to send women, according to a study by The Knowledge Academy. It found that employers sponsored 74% of men’s professional training, compared with 68% for women.
“Train people well enough so they can leave,” is a quote attributed to Richard Branson. “Treat them well enough, so they don’t want to.”
Another broken rung is gender imbalance. “There is an unsettling statistic that bodes ill for Asia,” Nikkei Asia reported in April 2017. “The region has roughly 100 million more men than women, with the biggest gulf seen in China and India.”
According to Statista, females comprised 48.6% of Malaysia’s population in 2020. The figure was 49.4% in Indonesia; 49.5% in the Philippines; 50.2% in Vietnam; 51.1% in Singapore; and 51.3% in Thailand.
The bottom line: What can companies do to have a more equitable workplace? Gartner suggests the following:
• Establish a structured programme for diversity, equity and inclusion;
• Set up tech ERGs (employee resource groups), which serve as a forum for women to focus and share their experiences and ideas, learn from mentors, hear from guest speakers, and develop strategies to navigate their careers. Also, bring in senior male co-sponsors to reinforce support for such programmes;
• Recruit women actively so that there is a robust talent pool from the lower to higher levels of management;
• Retain women through development, promotion and an inclusive work environment; and
• Report progress with an ability to troubleshoot problems and perform predictive forecasting.
Since we started with a fairy fable, let’s end with a genie joke. A man finds an antique oil lamp in a museum and rubs it. A genie spurts out from the spout. “You’ve released me from this curse,” the genie says. “I will grant you one wish.” The man clicks his tongue with glee. “I want all the ladies to love me,” he exclaims. The genie waves his hands in a puff of smoke — and the man turns into a box full of chocolate bars.