In the course of formulating and advising of the over 1,204 strategic plans and training of more than 700 boards both locally and internationally, I have noticed that many a time the female counterparts are requested to lead in prayer or to do domestic chores-like duties such as checking if the tea is ready.
Though it appears innocent, it raises the question as to whether corporates really appreciate the unique contribution of women on the boards or only see their appointment as a means of complying with the gender inclusion requirement of affirmative action.
In that regard, it is worth reviewing the unique value of women on boards.
Gender diversity on corporate boards is a growing necessity for companies to thrive and grow.
Due to their diverse perspectives, a better understanding of customers’ preferences and greater due diligence, inclusive and gender-balanced boards lead to better decisions.
Today, women account for about 70 percent of the global consumer demand and control about $28 trillion in annual consumer spending.
Despite this, they continue to be under-represented in decision-making. By accessing the under-utilised pool of qualified, competent and motivated women, companies can better understand their customers and stakeholders and bring a diversity of thought to the boardroom, thus strengthening the company’s competitive advantage.
According to Sheila Penrose, Chair of the Board, JLL Inc., “companies that overlook half of the world’s population overlook half of the world’s talent” and “to compete effectively, we need to reflect the diversity of the world in which we, and our clients, live and work.”
The business case for women on boards is compelling. A growing body of evidence shows that women’s participation in decision-making is positively correlated with the financial performance of companies.
According to a recent study by McKinsey & Company, gender-diverse companies are 15 percent more likely to have financial returns above their respective national industry medians.
This finding is not so different from that of Catalyst that Fortune 500 companies with three or more women on their boards significantly outperformed those with low representation by 84 percent, 60 percent and 46 percent on returns on sales, invested capital and equity respectively.
But it is not only to do with better financial returns.
Besides reinforcing a company’s culture and public image of diversity and inclusion thus cultivating and retaining the best talents, they are more likely to focus also on non-financial performance indicators such as customer satisfaction and corporate social responsibility, and are better able to monitor board accountability and authority, thus leading to improved corporate governance.
In terms of recognising and appreciating the value of investing in women, the Barclays’ Women in Leadership Total Return Index, which includes American companies with a female CEO or at least 25 percent female board members, is already topping the S&P 500 Index by 1 percent.
This notwithstanding, women still continue to be underrepresented on boards worldwide, with only 19 percent of global board seats occupied by women, less than 5 percent of the world’s largest corporations' CEOs being women and only 13 percent of companies surveyed having gender-balanced boards of between 40 percent and 60 percent women.
According to a survey of the Gulf Cooperation Council (GCC) countries, biases against women are the top barriers to women's leadership.
This is not so different from ILO Women in Business and Management report that puts family responsibilities, gender stereotypes and masculine corporate cultures as the top three barriers.
In fact, family commitment has been mentioned as the top-most cause of voluntary quitting of jobs by many women in mid-career or senior levels in Asia, Africa and the Pacific; women working in the financial sector in the UK earned 55 percent less annual average gross salaries than their male counterparts, while only 43 percent of women in Japan who tried to rejoin the workforce after childbirth found jobs.
Another barrier to women’s leadership is the segregation by sex within management functions.
The ILO survey shows that in most companies, functions such as human resources, public relations, communication, finance and administration have a higher concentration of women as compared to functions such as product and general management, research, operations and sales, which are dominated by men.
These “glass walls” make it difficult for women to sufficiently gather the diverse and broad experiences needed so as to be selected for top management jobs.
‘Glass ceilings’ has also been kept intact by the prevalence of age-old stereotypes and male-dominated corporate cultures.
In order to increase women’s participation in boards, six factors are critical. These include top leadership commitment by the active involvement of senior leaders in gender diversity; driving of gender intelligent actions through targeted actions; transparency in promoting equal opportunity for both men and women; promotion of flexible working arrangements; and creation of an enabling environment by valuing, identifying, mentoring, training and nurturing talented female employees.
On their part, women need to prove that they merit their positions by being more assertive and focused on their contribution in terms of strengthening financial performance, better decision-making, promotion and cultivation of talent, enhanced consumer insights and improved corporate governance.
And when they succeed, it will be clear that when women thrive, businesses thrive.