Diversity or merit? Women leaders tread a fine line
It is no secret that almost half the world’s population is women. Yet, more than 70 years after the Charter of the United Nations was signed to affirm the principle of equality between women and men, workplace gender equality remains a distant dream. This is particularly stark at senior levels. In S&P 500 companies in the US, women make up merely 26.5 per cent of the workforce in executive and senior-level positions according to Catalyst. What’s worse is that merely 5 per cent of the chief executive officers (CEO) in these companies are women.
So when General Motors led by a female CEO, Mary Barra, announced its first female chief financial officer (CFO) Dhivya Suryadevara, the corporate world stood up and listened. It is rare to find a woman CEO in a Fortune 500 company, and even rarer to find a female CEO-CFO duo at the helm.
Conceptually, diversity in the workplace is a moving target that will increasingly encompass a range of demographics. But at the fundamental level, diversity should more or less mirror the male-female ratio in our population. Yet, even in North American and Europe where women claimed their place in the job market long before it became a norm, the leadership positions are still dominated by men.
Apart from the modern day moral compulsions of ensuring equal opportunity at work, diversity at all levels gives companies a competitive advantage. Diversity in the boardroom brings a rich mélange of perspectives, thus leading to a holistic viewpoint. Surprisingly, companies that predominantly sell products to women often have a prdominantly male boardroom.
A major reason for the under-representation of women in the C-suite, is the strong old boys network at the top that takes a conservative approach to hiring. They tend to promote people like themselves to maintain a familiar club. Recently, the CEO of an airline in this region has famously said that his job was too challenging to be led by a woman. He did apologise later, though. If companies make conscious choices, such biases can be erased. In Estée Lauder Companies Inc., a boardroom dominated by women has fashioned a workforce that is predominantly female.
Many companies have made gender diversity a key part of their corporate agenda. Yet it remains a soft target, thus preventing the corporate world from conclusively breaking the proverbial glass ceiling.
This raises the question: should organisations tilt the scale in favour of women and enforce targets or allocate quotas to promote women at the cost of merit? This strategy would be grossly counter-productive. It would not really give the companies the competitive edge that diversity is meant to offer. Men would certainly not be party to it. Inclusion programmes require men and women to sit at the table to devise diversity strategies and execute on them. So Deloitte LLP replaced its employee affinity groups for women and minorities with inclusion councils that have white men.
Several reports suggest that companies with an inclusive boardroom bring a higher return on equity. But this must be based on merit. Lower respresentation of women in top management is because there are fewer women available to promote. This has to be reversed. Inclusion has to be ingrained in the organisation’s DNA. Companies have to dig deeper and focus on training and mentoring women to prepare them for leadership positions and reduce the current alarming mid-career attrition rates among women. BCG launched its Apprenticeship-in-Action (AiA) initiative that focuses on areas such as strengths-based development and coaching for communication styles. This has resulted in a 22 per cent increase in female promotions among senior managers and lower attrition rates.
Pay gap is a key reason why women end up quitting their job mid-career. Women get paid less than their male peers. In India, studies show that the gender pay gap is even wider for highly skilled women. We need to ask ourselves, ‘How did it come to be like this?’ If girls are consistently outdoing boys acedemically in India, how is it that they get paid 30 per cent less than similarly skilled male counterparts (Global Wage Report 2016/17, ILO).
For one, women tend to negotiate their salaries less than their male peers. Organisations perceive that it is okay to pay women less than men, or assign less strategic roles to women. Ironically, Alexander Hamilton wrote a report on manufacturers in 1791, wherein he made a case for using women and children in factories as cheap labour. He was one of the earliest advocates of particpation of women in the workforce!
Organisations must be aware of the pay gap and act on it. Gap Inc.’s Diversity and Inclusion Council has used strategies like evidence-based pay for performance practices and an organisation-wide pay equality analysis to close pay gaps.
Most importantly, we women must bring about change for ourselves. If we don’t will it, we won’t reach leadership positions. We have to help ourselves to overcome bias, through perseverence, self-confidence and selfassertion. Organisations, in turn, should not try to promote the best woman for the job but the best person for the job. However, they should do everything they can to help women become the best person for the job.
Shalini Verma is the CEO of PIVOT technologies
Many companies have made gender diversity a key part of their corporate agenda. Yet it remains a soft target, thus preventing the corporate world from conclusively breaking the proverbial glass ceiling.