Breaking the glass ceiling

Australian companies are lagging behind much of the world when it comes to the representation of women in executive and senior management positions.

The Equal Opportunity for Women in the Workplace Agency’s (EOWA) 2008 Census of Women in Leadership shows that Australian companies have a long way to go.

The report found that there are only four female CEOs and four female chairs in the ASX top 200 companies. This compares to 13 women CEOs in the US Fortune 500 and 27 women CEOs and company heads in Canada’s FP500. Five percent of CEOs in New Zealand are women.

These figures pose two important questions – what are the reasons for the under-representation of women in corporate leadership and what approaches have worked in addressing this problem elsewhere in the world?

Why do women under-represent?

There are many possible answers to this question. One is that conscious discrimination is still prevalent within the corporate world. Women are often overlooked when it comes to awards, promotions and other forms of effort recognition, in favour of their male colleagues. A common saying is that women often have to work twice as hard as men to be considered their equals and there is some truth to this adage.

In 1983, a study was conducted by Paludi and Bauer in which 360 American university students, half male and half female, were asked to evaluate the same academic papers on a scale of one to five (one being the best mark). The papers were fictionally authored by a John T. McKay, Joan T. McKay or a more ambiguous J. T. McKay. Not surprisingly, students favoured the papers by John T. McKay and graded them an average one point higher than those written by Joan. These beliefs are prevalent in the corporate world too.

Executives in many organisations still aren’t used to the idea of women heading companies or taking other leadership roles. The boardroom continues to be a patriarchal institution and one in which women can understandably feel quite intimidated. However organisations that fail to appreciate the benefit of a diverse leadership are denying themselves of the talents of at least half the population. After all, 80% of consumer spending is female-bound. And who understands this market better than other women?

A great example of this is PepsiCo who have seen a 72 percent increase in revenue since appointing Indra K. Nooyi as Chief Financial Officer in 2001 and subsequently as CEO of the company in 2006.

Finally, another significant barrier facing women executives is the elusive issue of work and life balance. Most successful businesswomen get to the dreaded crossroads in their careers where they are required to choose between the demands of furthering their careers or sacrificing it in favour of spending time with their growing family. Balancing both priorities can be extremely difficult without flexible work arrangements in place.

What approaches have worked?

There have been many approaches implemented around the world aimed at achieving gender parity in the boardroom.

In 2008, Norway achieved the highest proportion of female non-executive directorships in the world at 40%. This was the result of a compulsory government quota introduced after voluntary legislation failed to make an impact. In 2002, 470 out of the 611 companies the legislation now applies to, had no female board members. This is an astounding improvement in six years.

However, compulsory quotas are not for everyone. The success of the quota in Norway can partly be attributed to the country’s strong history of embracing affirmative action policies.

Company policies that turn diversity into a measurable goal are also important. Corporate targets are often based on numbers such as increased profit and market share, however workplace diversity is another, equally important goal which should be strived towards fervently.

In addition, ensuring that staff have access to family-friendly work arrangements is essential. Corporations should move away from the association of part-time work with menial jobs and adopt a more open-minded approach. Factors such as flexi-time arrangements, paid maternity and paternity leave, onsite childcare and the option for new parents to return to work part-time can all have dramatically positive affects, both for the organisation and employee morale.

Corporate culture also plays a role in the ability for women to advance to the higher levels. Research conducted by Fortune magazine shows that women tend to thrive in transparent environments. Empirical standards, clear goals and frequent reviews are all company attributes which allow women to excel.

While the above may make executive-level diversity seem like a difficult goal to attain, it is certainly a worthwhile one to work towards.

Kjell Erik Oie, Deputy Minister of Children and Equality in Norway concludes, “Very seldom do men let go of power easily. But when you start using…half of the talent you…previously ignored, then everybody gains.”