No. CCXLVII; September 23, 2016
THIS ISSUE’S HIGHLIGHTS:
I. MORE WOMEN IN LEADERSHIP LEADS TO MORE PROFITS
II. TAKING GENDEROUT OF FAMILY LEAVE POLICIES
III. WOMEN’S ECONOMIC EMPOWERMENT AT TOP OF GLOBAL AGENDA
IV. WHAT IT TAKES TO REACH THE TOP
V. WOMEN BRING MORE TECH EXPERIENCE TO THE BOARDROOM
I. MORE WOMEN IN LEADERSHIP LEADS TO MORE PROFITS
The Credit Suisse Research Institute released its 2016 CS Gender 3000 report reaffirming its prior findings that companies with a higher participation of women in decision-making roles continue to generate higher market returns and superior profits, while running more conservative balance sheets. For instance, companies with more than 25% women in management fare better than companies with only 15%, and companies with over 50% women senior executives (of which there are 61 out of 3,000 companies in the study) show superior sales growth and higher cash flow on investments. As female participation increases in senior management, so does performance, providing more quantitative evidence of the enhanced decision-making and governance that gender diversity enables within organizations.
The report also debunks the “Queen Bee” Syndrome which argues that women who have made it to senior positions actively seek to exclude other women from promotions into top management. The findings show that female CEOs globally are actually significantly more likely to surround themselves with other women in senior roles. Women CEOs are 50% more likely than male CEOs to have a female CFO and 55% more likely to have women running major business units within the company. An example is General Motors CEO Mary Barra, who has a 50/50 gender-balanced Board. Ms. Barra has been credited with leading GM’s turnaround after the recall scandal that began just as she stepped into her CEO position. (PR Newswire, “Credit Suisse Research Institute Releases the CS Gender 3000,” 9/22/16)
II. TAKING GENDER OUT OF FAMILY LEAVE POLICIES
The U.S. is one of few countries without paid parental leave policies, which often leaves families with limited options for child care. Over the past few years, however, a number of U.S. companies have been ramping up their paid parental leave programs as a means to attract and retain more young talent. New parents at Google can receive up to 18 weeks of paid leave; Etsy employees can get six months, while new parents at Netflix may take off a full year. A new policy announced this month by Deloitte adds a new twist to the parental leave perk by extending the benefit not only to new parents, but to any employee with family care-giving responsibilities.
Deloitte’s gender-neutral policy makes family leave available to more than just parents. For example, the new policy allows a single male in his 40s to take a few months off to care for his elderly mother in the same way a new mother could take leave to care for her new child. Since older workers and men could take time off in the same manner as a new mother, the stigma attached to taking time off for child care may lessen in time and may also help managers to better understand the challenges their employees face when they must leave the workforce for a period of time for family reasons.
Introducing a generous leave program that includes all kinds of caregiving could be a step toward making the practice of taking leave from work for family-care less attached to employees of a certain group or age. (“This New Paid Leave Policy May Be the Smartest Perk for Families Yet,” Washington Post, 9/12/2016)
III. WOMEN’S ECONOMIC EMPOWERMENT AT TOP OF GLOBAL AGENDA
The UN’s High-Level Panel for Women’s Economic Empowerment this week presented its first findings as it aims to place women’s economic empowerment at the top of the global agenda as the UN General Assembly meets in New York. The report draws attention to the challenges faced by the most disadvantaged women, to bring informal work from the margins to the mainstream, to highlight how discriminatory laws limit choice and to shed light on the centrality of unpaid work and care.
“Closing the pay gap between women and men and finding solutions to the unpaid work done by millions of women and girls will have a huge impact on women’s ability to shape change in their lives,” said Phumzile Mlambo-Ngcuka, Executive Director of UN Women. “This is the time, for us, and for the world, to put gender equality and women’s empowerment at the center of the changes to which we all aspire, and make a real impact on poverty.”
Research shows that women invest their income back into their families and communities, including in health and education. The McKinsey Global Institute estimates that if women in every country were to play an identical role to men in markets, as much as $28 trillion would be added to the global economy by 2025. (UN Women, “First Report by High-Level Panel on Women’s Economic Empowerment outlines drivers to advance gender equality,” 9/22/16 )
IV. WHAT IT TAKES TO REACH THE TOP
For women to become the boss takes more than hard work, intelligence, leadership ability, and luck. New evidence from a survey of management consultants conducted by LinkedIn shows another attribute which seems to be particularly important – experience in as many of a business’s functional areas as possible. A person who stays for years in one department, such as finance, has less chance of reaching the C-suites than someone who gains experience in multiple departments, such as finance, marketing, and engineering, for instance.
In one scenario, a woman with an MBA and 15 years’ experience has a 16% chance to reach an executive position if she has worked in only one department, while a woman with the same background has a 40% chance to reach a top job if she has worked in six different departments over the same 15 years.
There is a caveat to too much variety: switching industries has a negative correlation with corporate success, which lends support to the importance of building relationships and experience within an industry. Switching between companies within an industry, however, neither helps nor hurts reaching a top job. (New York Times, “A Winding Path to the Top”, 9/11/16)
V. WOMEN BRING MORE TECH EXPERIENCE TO THE BOARDROOM
Female members of corporate boards are nearly twice as likely as their male counterparts to have professional technology experience, according to research covering companies in 39 countries conducted by Accenture. The research found that 16% of women directors have technology experience compared to just 9% of men directors.
Overall, only 10% of board directors have any technology experience, an alarmingly low percentage. As companies operate more and more in the digital arena, the need for directors with technology experience presents another opportunity for women to gain access to board positions.
“As technology disrupts virtually every industry, companies need to think more broadly about the type of skills and experience needed for their boards,” said Roxanne Taylor, Accenture’s Chief Marketing and Communications Officer. “At the same time, they need to stay focused on gender diversity, since organizations with diversity at the board level perform better. Women directors with technology experience bring diversity and valuable insight – a clear recipe for strategic advantage.”
Examples of women now sitting on corporate boards who came through the technological ranks include Patricia Russo, who worked for several years at Lucent Technologies before becoming their CEO, and Sari Baldauf, an executive at Nokia. Russo now serves on the Boards of Alcoa, Merck, and GM, while Baldauf sits on the Supervisory Boards of German giants Daimler and Deutsche Telekom.
The study found large differences among industries. The tech industry had the highest percentage of tech-savvy women board members at 51%, while banking and insurance are at the bottom of the list with only 8% and 2% of women directors with tech experience. (Accenture Press Release, 8/31/16)
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