For the second year in a row, the number of women in senior management has come close to reaching the tipping point for greater diversity, a global survey on gender diversity suggests.
Worldwide, women hold an average 29% of senior management roles, according to Grant Thornton’s Women in Business 2020 survey of almost 5,000 mid-market businesses. That’s the same percentage as last year, but five percentage points higher than in 2018.
Regionally, Africa has the highest proportion of women in senior management at 38%, followed by Southeast Asia (35%), Eastern Europe (35%), and Latin America (33%). In the EU and Southern Europe, women hold 30% of senior management roles. The bottom two regions are North America (29%) and Asia Pacific (27%).
Globally, 87% of businesses report employing at least one woman in senior management.
“This report is a good reality check to us all,” said Kamaya Perera, ACMA, CGMA, a management consulting partner at KPMG in Sri Lanka. “Women are slowly but steadily disrupting the workforce, and we are here to stay. It brings me great pleasure that the hard work put in by women of yesterday and the women of today has reaped benefits; it also is a wake-up call that our work isn’t done yet and there is so much more to do for the women of tomorrow.”
An increasing number of businesses are taking real action to increase the proportion of women in leadership, according to the report.
Africa, Southeast Asia, Eastern Europe, Latin America, and Southern Europe saw increases in the proportion of women in senior management roles, with all regions reaching or surpassing the 30% tipping point.
Southeast Asia jumped from 28% to 35%, due to a range of initiatives across the region. For example, Malaysia’s goal is to achieve 30% female board representation in the top 100 publicly listed companies in 2020, and Singapore required listed companies to publicly disclose their board diversity policies as well as their progress in meeting those targets in their annual reports.
“Business leaders need to champion the cause of gender diversity and create inclusive cultures in which a wide range of voices are listened to,” said Sze Min Yu, director at Grant Thornton Singapore. “Leadership from the top is key to driving change as is setting clear diversity and inclusion goals against which progress can be measured.”
The business case for women at the top
Gender diversity is not just about optics; there’s a very real business case for placing more women at the top. A report by S&P Global found that firms with female CFOs are more profitable, and firms with female CEOs and CFOs have produced superior stock price performance.
Previous research by Grant Thornton has also shown that among the largest listed companies in India, the UK, and the US, those with gender-diverse boards are outperforming their male-only peers by approximately $655 billion annually.
“Having more women in senior management is a no-brainer,” Perera said. “Globally, women make up close to 50% of the population; companies can’t afford to lose out on this wealth of talent.”
4 steps to improve gender diversity
So, what can businesses do to take advantage of half the population’s talent? The Grant Thornton report suggested six pillars: champion the business case, know your diversity data, identify and source talent, open up development and advancement, retain diverse employees, and create an inclusive culture.
Here are first steps leaders can take to tackle them:
Remove bias from recruitment. Bias is often unconscious, making it extremely difficult to eradicate from the hiring and promotion processes. Even subtle details like the language used in recruitment ads and job descriptions can discourage those who don’t identify with the position from applying.
Affinity bias is a common hurdle; people tend to hire others with similar traits, resulting in uniformity. To help keep the recruitment process diverse, make sure women candidates are included at every stage, from start to shortlist, and aim to have both men and women interviewing candidates.
Another common issue for women in business is that those who take time off after having a child often struggle to get back into the workplace. Perera argued that businesses need to set aside their bias and be open to hiring those who have taken a career break to focus on their family.
Open up development and advancement opportunities. When Grant Thornton asked male and female leaders about their biggest barriers to promotion, many women said they suffered from a lack of developmental work opportunities. Businesses should make growth opportunities and mentoring programmes available to all regardless of gender, although part of the issue may be that 70% of development opportunities are informal and men are typically provided with more feedback, according to Grant Thornton.
In order to ensure women have access to big, visible projects and mission-critical roles, the accounting firm recommends formalising these “hot jobs” and distributing them as equally as possible. And, of course, everyone should be paid equally for doing the same job.
“Pay for the experience and qualifications people bring to the table, not the gender,” Perera said.
Retain diverse employees. One of the most effective ways to increase gender diversity is to offer flexible working opportunities, according to Boston Consulting Group. By allowing flexible working hours and work-from-home options, businesses can broaden their pool of talent and enable employees to have a more balanced life.
Perera pointed out that while more women are taking on larger roles in the workplace, many are simultaneously most responsible for their households.
“Juggling both of these, and not dropping the ball on either, can lead to women not prioritising themselves,” she said. “This can lead to mental, as well as physical, health downfall. So it’s important that we allow flexibility at the workplace, as well as encouraging the men around us to take a more significant role in the household.”
Create an inclusive culture. Creating an inclusive culture is another elusive goal, but fundamentally, it involves making sure everyone feels safe enough to speak up and contribute their ideas, regardless of their race or gender. Culture change is by no means easy.
“It is one of the hardest things you can do, because you are not asking one person to change their behaviour, you are trying to get a whole organisation to change their mindset,” said Kim Schmidt, global leader of leadership, people, and culture at Grant Thornton in the Blueprint for Action. “As organisations, to survive and thrive, we need an innovative culture, and diversity is essential for that.”
— Hannah Pitstick is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at Alexis.SeeTho@aicpa-cima.com.