Issue No. CCXVI; February 9, 2014
THIS ISSUE’S HIGHLIGHTS:
I. HOW CEOS CAN SPEAK ABOUT GENDER DIVERSITY: KPMG UK REPORT
II. THE TECH WORLD’S ‘WOMAN PROBLEM’
III. NEW APPROACHES TO OPENING UP BOARDS FOR WOMEN
IV. LEADING COUNTRIES OUT OF CONFLICT & TURMOIL: CENTRAL AFRICAN REPUBLIC’S AND LATVIA’S NEW LEADERS
I. HOW CEOS CAN SPEAK ABOUT GENDER DIVERSITY: KPMG UK REPORT
At last month’s World Economic Forum, KPMG released a new report which indicated that CEOs need to reach beyond the business case argument for women in senior roles to drive diversity deeper into their organizations. CEOs often push for diversity due to the influence of strong women in their lives or other personal reasons. Yet, they tend to downplay the personal reasons and instead speak of the need for diversity primarily for the commercial or business benefits – that companies with more women in senior management and boards tend to have better financial performance based on numerous studies.
Simon Collins, Chair of KPMG UK adds: “CEOs need to talk about the issue from a personal perspective and authentically to win hearts and minds. Much has been written about the importance of leadership in driving change on gender parity but to date there has been little insight in to the specific contribution of the CEO. Something needs to change if we are to make better progress on diversity and this research makes it clear that the “something” is how we as CEO’s talk and act. Starting with ourselves gives our businesses – and the women in our workforces– the best possible chance of the legacy on gender diversity that as CEO’s we say we want to leave, and that they so richly deserve.” (Source: www.kpmg.com, 1/22/14)
At this year’s Global Summit of Women, five CEOs will explore precisely their roles in enabling their respective companies to implement more inclusive leadership – Michel Landel of Sodexo, Frederic Oudea of Societe Generale, Thierry Pilenko of Technip, Gianmarco Monsellato of Taj France and Sol Trujillo, former CEO of US West, Orange (France) and Telstra (Australia). (Go to www.globewomen.org for more information on the 2014 Global Summit of Women.)
II. THE TECH WORLD’S ‘WOMAN PROBLEM’
When Facebook was launching its IPO, a Wall Street Journal editorial questioned why it had an all-male Board when 58% of its users were women. After the company went public, COO Sheryl Sandberg was appointed to its Board. When Twitter announced its own IPO, a New York Times reporter asked why its Board had no female directors since most of those who tweet are women. Soon afterwards, Marjorie Scardino, CEO of Pearson, was named to its Board. In both instances, these media questions were echoed by investor groups and women’s organizations, which added to the external pressure for both companies to include a female director.
Now, its Apple’s turn. Two major investment funds with holdings in the company, Trillium Asset Management and the Sustainability Group questioned why this technology juggernaut had only one woman on its Board, Andrea Jung, former Avon CEO, and only one female senior executive, Angela Ahrendts, former Burberry CEO, reporting directly to Apple’s CEO. After months of negotiations, Apple announced that it is adding language to its charter that it is “committed to actively seeking out highly qualified women and individuals from minority groups to include in the pool from which board nominees are chosen.” (Washington Post, 1/8/14)
Hailed as an important first step, the question remains as to why the tech industry has such a paucity of women in its top ranks. Part of the answer lies in the fact that most board directors in this industry are investors, predominantly white males, resulting in 43% of Silicon Valley’s top 150 companies having zero female board directors and 40% with only one women-held board seat. In comparison, the 98% of S&P100 companies have at least one female director and 70% have two or more. (www.businessinsider.com.au/author/LydiaMallett)
PERCENTAGE OF SILICON VALLEY COMPANIES WITH NUMBER OF WOMEN BOARD DIRECTORS
At the June 5-7, 2014 Global Summit of Women in Paris, a new report on the global status of women director will be released, and a Roundtable on Board Diversity will explore myriad initiatives from business and government in several countries to address gender equity on corporate boards. (For more information, log on to www.globewomen.org)
III. NEW APPROACHES TO OPENING UP BOARDS FOR WOMEN
While Silicon Valley’s tech companies may not be leading the way in placing women on boards, there are several initiatives recently undertaken by business and government to accelerate women’s access to board seats. In the U.K., where the government has threatened a quota if its largest companies — the FTSE 100 — do not reach 25% women directors by 2015, one company has taken a broader measure. Lloyds Banking Group announced in early February that it will ensure at least 40% of its top 5,000 positions are held by women by 2020. Lloyds is the first company to set an internal target higher than that set by peer companies, whose current percentage of female directors already bests many in the FTSE 100. (The Guardian, 2/2/14)
In Germany, two leading parties reached an agreement in November 2013 for all listed companies to have at least 30% women on their Supervisory Boards (the independent body equivalent to a Board of Directors in Germany’s two-tiered corporate governance system) by 2016. The agreement has put gender quotas as one of the top items on the agenda for the new government, which is expected to pass the legislation in the coming months. (Bloomberg Businessweek, 12/13/13)
In the U.S., California has become the first state to pass a resolution urging all publicly-held companies in that state with nine or more directors to have at least three women on their boards by December 2016. Companies with five to eight members are urged to have at least two women, while those with fewer than five members should have at least one woman. (www.leginfo.ca.gov) This non-binding resolution cites the growing body of research concluding that companies perform better when they have women on boards. It also came in the wake of Silicon Valley companies mentioned above having to be pressured to include female board directors.
California State Sen. Hannah-Beth Jackson sponsored a resolution to press companies to add female directors. Photo courtesy of the Associated Press.
IV. LEADING COUNTRIES OUT OF CONFLICT & TURMOIL: CENTRAL AFRICAN REPUBLIC’S AND LATVIA’S NEW LEADERS
There is an old adage that says if you want to get something done, hire a woman. Well, two countries have done precisely that, in part, as a way out of emerging from troubled times. They are interim leaders, chosen not just as place holders but as keys to moving their countries forward.
A former Mayor of Bangui, the capital of the Central African Republic, Catherine Samba-Panza, is the first woman to lead her nation, and it is her task to lead her country out of a sectarian civil war to national elections. She succeeds Michel Djotodia, who led a nine month reign of terror and was forced to resign by regional and western powers for allowing the civil war to fester, leaving a nation so fractured and on the edge of free fall. Cheers followed her defeating seven other candidates, including two sons of former presidents. “Everything we have been through has been the fault of men. We think that with a woman, there is at least a ray of hope,” stated Marie Louise Yakemba, a civil society leader who echoed everyone’s sentiments. (New York Times, 1/21/14)
The new Prime Minister of Latvia, Laimdota Straujuma, was also selected to form a new government and to bring stability to a country reeling from the sudden resignation of the former Prime Minister last November. Taking political responsibility for the sudden collapse of a supermarket roof, which killed 54 people and injured many more, the former PM’s actions traumatized a country of 2 million people already shocked by this calamity. Ongoing investigations continue on the roof’s collapse in the capital city of Riga.
An economist and the current Minister of Agriculture, Ms. Straujuma’s tenure will be even shorter than that of the President of the Central African Republic, as she leads her country to elections in October 2014. Until then, she needs to keep the economy on an even keel at the same time. (Wall Street Journal, 1/6/14) Roza Otunbayeva was also the interim President of Kyrgyzstan, which she successfully led to full elections, taking herself out of the running as she set up the infrastructure for a sustainable democracy. The Global Summit of Women saluted her in 2012 for this feat and for showing another example of how women lead – not by trying to hold on to power as men do, but by giving it up for her people. (For an up-to-date listing of women Presidents and Prime Ministers, go to www.globewomen.com and scroll down to listing with photos.)
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