Inclusivity in Business - Be the Change

We have come a long way when it comes to equality in the workplace in terms of raising awareness of the problem, but we still have a long way to go to solve it.

A 2020 report from the United Nations ‘ The worlds Women 2020: trends and stats’ suggests that globally women held only 28% of managerial positions in 2019 a steady but slight increase since 2000. Some key points in the ‘Women in managerial positions’ chapter include:

  • In countries in Northern Africa, Western Asia, Central and Southern Asia, the proportion of females in managerial positions barely reached 13%, a statistic that has not changed significantly over the past 20 years.
  • Women CEOs or top managers are even more scarce: only 18% of enterprises surveyed by the World Bank had a woman CEO.
  • Among Fortune 500 corporations, women accounted for only 7.4%, or 37 out of 500 CEOs. Only 1 out of the top 500 corporations had a female CEO.
  • The bigger the enterprise, the lower the chances of it having a woman CEO: over 26% of small enterprises surveyed by ILO in 2018 (employing 2 to 100 workers) had female CEOs, compared with 16% of large enterprises (employing more than 250 workers). 
  • Enterprises with more women in their workforce are more likely to have a female CEO. Of the enterprises surveyed by ILO in 2018, enterprises with a gender balanced workforce were 15% more likely to have a female CEO; and enterprises with a predominantly female workforce (between 61% and 100%) were 22% more likely to have a female CEO

 

Is there then a link between the size of a company and the fact that there will be a female CEO?

Not so, says the UN report as there are various factors globally at play. While large companies have higher profiles and may be less likely to discriminate against women candidates for top managerial positions, they also tend to be more hierarchical, making it more difficult for women to reach those positions as they may fall behind men in terms of networks, training, and relevant job experience. Recent evidence shows that the proportion of enterprises with a female CEO shrinks as the size of an enterprise grows: over 26% of small enterprises (employing 2–100 workers) have female CEOs, compared with 20% of medium-sized enterprises (employing 101–250 workers) and 16% of large enterprises (employing more than 250 workers)

In ‘Women in the Workplace 2019’, McKinsey reports that in the last five years, we’ve seen more women rise to the top levels of companies. An increasing number of companies are seeing the value of having more women in leadership, and they are proving that they can make progress on gender diversity.

 

So how do we go about changing this?

The McKinsey report suggest that the “glass ceiling” that prevents women from reaching senior leadership positions might not be the biggest issue gender diversity at senior level but in reality, the biggest obstacle that women face is much earlier in the pipeline, at the first step up to being a manager. The ‘broken rung’ that exists as women and other underrepresented groups face as they begin to climb the ladder. There are signs the glass ceiling has a few cracks in it signified by more women becoming senior leaders, driven by two trends:

  • More women are being hired at the director level and higher than in the past years. Second, senior-level women are being promoted on average at a higher rate than men.
  • Men at the SVP and C-levels are slightly more likely to leave their companies, creating more open positions for women to fill.

But the “broken rung” needs to be fixed because it prevents women from reaching the top. The report goes on to highlight that the biggest obstacle women face on the path to senior leadership is at the first step up to manager. For every 100 men promoted and hired to manager, only 72 women are promoted and hired. This ‘broken rung’ results in more women getting stuck at the entry level, and fewer women becoming managers. Which implies that men end up holding 62 percent of manager-level positions, while women hold just 38 percent.
 

Although American based, the McKinsey report gives a roadmap to fix that ‘rung’ centred around promoting more women earlier, diversity targets, unconscious bias training for middle and senior managers and transparency around the evaluation criteria.

 

UN’s ‘Women Worlds Women 2020 – Power and Decision Making’ has a more global perspective and highlights. Government intervention has proven to be an effective method

for improving gender diversity on corporate boards. Since the adoption of legislative action to set a gender target for board membership in 2010, the average proportion of women on the boards of the largest listed companies in the EU has doubled (from 11.9% in 2010 to 28.8% in 2019). Furthermore, in those countries in the EU with legislative quotas, women’s representation on boards increased by 20 percentage points more than in countries without quotas or related actions.

 

Whilst they agree in the slight increase, they draw attention to the fact that at the current pace, the goal of 30% of women’s representation on boards will not be reached until 2029. The graph from Gender Statistics Database below shows how effective quotas can be.

 

 

It turns out that not only as women, do we have to negotiate ‘broken rungs’, but ‘glass walls’ on our way to smash the ‘glass ceiling’. A glass wall which restricts women to support management positions rather than strategic management functions, is evident still at the board level.

 

Data compiled by the Deloitte Global Centre for Corporate Governance in 2018, covering nearly 7,000 companies in 66 countries, show that the proportion of female board chairs is less than 10% in almost all regions. The Data-driven change Women in the boardroom A global perspective a 2019 report highlights the following globally and is worth a read if you want information on specific countries, with the lowest being Qatar with a 0.6% and Norway showing the highest percentage of female board chairs 41% for those interested the UK with soft government interventions ranks 13th with 22.7%.       

 

 

The report also highlights the key industries women are succeeding in reaching the top of the ladder broken down by first level geographical regions.

 

 

Not only are women dealing with a barrier based on gender. Within the big unbrella of sisterhood there are further inequalities such as; women of colour, lesbian and bisexual women, and women with disabilities are reporting having larger and worse experiences than women overall. The McKinsey report highlights that Black women and women with disabilities face more barriers to advancement, get less support from managers, and receive less sponsorship than other groups of women.

 

Not surprisingly, women in these groups are far less likely to feel they have an equal opportunity to grow and advance and are far less likely to think the best opportunities go to the most deserving employees. They are also less happy at work and more likely to leave their company than other women are. It is important for companies to understand that all women are not having the same experience and to directly address the unique challenges that different groups of women face.

 

They also report that at the beginning of 2020 in the US, whilst trends are going in the right direction, women are still underrepresented, particularly women of colour. Which although shows a painfully slow improvement in 5 years, really highlights that not only must we do more for women but more for women of colour and similarly those of minority religions, and disabilities.

 

Women returners are also facing a ‘broken rung’. When returning to work after a career break for family or care duties are struggling to return to their ‘old’ jobs and feel torn between family and work commitments experiencing an impossible situation of striving to do all and failing to do neither. Depending on the support a woman has when she returns to work will determine how she succeeds. It is also not surprising that many women choose to give up work or become self employed giving themselves more freedom to work around family/care commitments.

This issue of family/care commitments is spotlighted again in The Alison Rose Review in 2019 when they investigated the barriers to female entrepreneurship and highlights key barriers as being:

Funding - Start-up funding is the main barrier mentioned by women non-entrepreneurs: women start businesses with 53% less capital on average than men, are less aware of funding options and less likely to take on debt. Only 1% of all venture funding goes to businesses founded by all-female teams, inhibiting scale up.

Family/Care commitments - Women are twice as likely as men to mention family responsibilities as a barrier to starting a business, and rates of entrepreneurialism fall sharply for women after the age of 35 compared to men. For female entrepreneurs with children, balancing family demands is the key barrier to success.

 

Entrepreneur Support - Women typically have higher risk-awareness than men and are more cautious about starting or scaling a business. The Rose Review highlighted women are less likely to believe they possess entrepreneurial skills, are far less likely than men to know other entrepreneurs or to have access to sponsors, mentors or professional support networks.

 

Whilst the review was conducted by and for the UK, they reviewed the actions of peer countries seeking the success of best practice in Canada, the US and The Netherlands. The results of which show:

 

  • Canada’s female/male entrepreneur ratio increased by 33% between 2006–2017.
  • The US has increased the number of female entrepreneurs by 20% and improved female/male ratios by 6% since 2008.
  • The Netherlands has focused on helping all entrepreneurs: female entrepreneurs have benefited the most.

 

The UK Government report Gender equality at every stage: a roadmap for change in 2019 says promoting gender equality is firmly in our national interest. It is important for the country’s society, individuals, employers, the economy, and well-being. In this report the government will tackle 8 key issues, and the result should show a closing of the gender pay gap, though these initiatives can be implemented many of them (as with the other roadmaps) will take time to filter through to the working environment. This roadmap however, targets issues outside of the workplace such as education in schools, advertising campaigns and realignment of benefits worth noting that they are aimed at men as well as women:

 

Tackling limiting attitudes to gender (Males & Females) - A society where children and adults are not limited in their choices, opportunities or success by expectations and perceptions about gender.

Women tend to work in lower paid sectors and occupations and are less likely to progress - A better gender balance across higher and lower paid industries and occupations. We want to help women enter the labour market, be empowered to stay on and progress at work at an equal rate to men and go as far as their talents and ambition can take them.

The working age benefits system hasn’t always tackled the disadvantages that women and those with caring responsibilities face - A Universal Credit to work for women, supporting them into quality jobs equal to their skills, with no perverse incentives in the system.

Women take more time out of the labour market to care for children - For both parents to take active and well-informed choices about balancing work and care,

 

supported by a fair and clear government offer; employers need to create inclusive workplaces fit for the future – showing equal consideration of work-life balance for

all employees and facilitating flexible working to retain staff; and infants to reap the known benefits of spending time with both parents (where they have the opportunity to do so).

 

Women are providing more informal care and unpaid work for others - For everyone who is providing informal care to be able to make informed decisions about combining work and care before they reach a crisis point, including the implications of those options for their longer-term employment, finances and wellbeing. We want those who take on caring activities to be able to remain in the labour market, claim the benefits and support they are entitled to, and to be recognised for the contributions they make at work and in their caring role.

Helping people to return to work after taking time out for caring - We want more women to enter and return to the labour market, supported to up-skill or re-train if needed, and employers to recognise the value of these workers.

Women are more likely to face financial instability later in life - We need to tackle the structural inequalities in the labour market that lead to the private pensions gap and to empower people to take informed decisions about saving across their life course so that women do not bear the financial brunt of caring.

We need to ensure we have the right foundations for the future - To sustain our robust and world-leading legislative framework and public services that support women. We will work across government to ensure that protecting and advancing equality is at the forefront of preparing for the future.

 

So once we have tackled the outside influences how can we get more women sitting and chairing on the boards in industry throughout all sectors?

The Alison Rose Review suggests 8 initiatives over the three key areas highlighted in the report that can be put in place swiftly in the UK. Even though the review was only published in March 2019, it is heartening to know many of them are being replicated up and down the country on a regional level but also on the main government agenda.

  • Opportunity 1: Increase funding directed towards female entrepreneurs.
    • Initiative 1: Promote greater transparency in UK funding allocation.
    • Initiative 2: Launch new investment vehicles to increase funding going to female entrepreneurs.
    • Initiative 3: Encourage UK based institutional and private investors to further support and invest in female entrepreneurs.
  • Opportunity 2: Provide greater family care support for female entrepreneurs.
    • Initiative 4: Review existing and create new banking products aimed at entrepreneurs with family care responsibilities.

 

  • Opportunity 3: Making entrepreneurship more accessible for women and increasing support locally, through relatable and accessible mentors and networks.
    • Initiative 5: Improve access to expertise by expanding the entrepreneur and expert in residence programme.
    • Initiative 6: Expand existing mentoring and networking opportunities.
    • Initiative 7: Accelerate development and roll-out of entrepreneurship-related courses to schools and colleges.
    • Initiative 8: Create an entrepreneur digital first-stop shop.

 

It’s not all doom and gloom: the Hampton-Alexander Review FTSE Women Leaders Improving gender balance - 5 year summary report February 2021 had clear goals in 2016 where the review set out five key recommendations aimed at increasing the number of women further from the previous 5 years, this time, in the management layers below the board. The recommendations called for more action from all stakeholder groups, increasing the target to 33% from 25% for FTSE 350 boards and the leadership teams initially of FTSE 100 companies. Those early voices ambitious to see change had not fully understood the issues women face, and nor could they be expected to have. Each year reveals new challenges or deeper insights into existing ones.

 

Despite the COVID effect, 2020-2021 is no different.

 

The review highlights that during the summer of 2020, the Black Lives Matter campaign shone a harsh spotlight on racial inequality. The devastating social and economic impact of the pandemic has taken its toll everywhere, but the consequences are uneven. Early statistics indicate black and ethnic minority communities have been the most impacted, and women are over-represented in redundancies and furlough numbers. So, despite reaching the 33%, few leaders will be saying the ‘job is done’.

New challenges added to the list include:

  • Too many leaders lacking skills & ill-informed on diversity.
  • Workplace behaviours, myths and gender-stereotyping.
  • Building trust and developing more up-standers and allies.
  • More equal parental leave policies & affordable childcare.
  • The Gender Say Gap, the pre-dominance of male voices.
  • Bias in selection, too few women in top CEO, FD and Chair roles.
  • 65–70% Board & Leadership roles occupied by men.
  • Appointment rate heavily skewed towards men.

 

Whilst the review highlights what still needs doing it is nice to end on a note of success. Recent growth in women reaching the top levels on boards with growing numbers year on year. They congratulate the 68 FTSE 100 companies that have reached, or exceeded the 33% target, and are reaping the benefits of improved gender balance on the board. Compared to only 20 companies in 2015 that have reached 33%, this is a significant step forward. More companies have announced additional women appointments to their board since publication, which means they will meet the 33% target in the first half of 2021. However, this leaves 25 companies in the FTSE 100 that have fallen short of the target, and still have some way to go. During the year, 52 companies increased the representation of women on the board, some substantially so.

 

The number of companies with five or more women at the board table is becoming more commonplace, increasing from seven companies in 2015 to 26 today. Only 14 FTSE 100 companies have two or less women, compared to 42 previously.

Be inspired, be inclusive, be the change we need.

 

Join the discussion!

We wrote this article because, not only of the inspirational women we talk to every day but as an opening to create discussion about inclusion in business for all underrepresented groups. As a result of those conversations we organised the international event 3i- Inclusive International Innovation (11-12 March 2021) Aiming to discuss these topics with you and allow companies and stakeholders to meet and partner with likeminded people.

Contact the author to join the discussion and shape how future events could highlight and raise awareness for inclusion barriers you might face starting, sustaining and scaling your business.

 

Claire Robinson

Innovate UK Edge

claire.robinson@innovateukedge.ukri.org

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Reports referenced:

The reports cited in this article are listed below, if this topic is one you are passionate about please read then as we only took a snapshot and there is so much more information available along with further resources listed in them

The World's Women 2020 Trends and Statistics - United Nations - 2020

Women in Business and Management: -A Global Survey of Enterprises - International Labour Organization (ILO) -, 2019.

Women in the Workplace 2019 – McKinsey & Co and Lean in - 2019

Women Worlds Women 2020 – Power and Decision Making - United Nations - 2020

Gender Statistics Database – Europa - 2019

Data-driven change Women in the boardroom A global perspective - 6th Edition- Global Corporate Governance Centre - 2019

Gender equality at every stage: a roadmap for change – Gender Equality and Economic Empowerment Policy Team - 2019

The Alison Rose Review – HM Government - 2019

Hampton-Alexander Review FTSE Women Leaders Improving gender balance - 5 year summary report February 2021 – 2021

 

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