Gender diverse leadership performs better in a crisis

A recent study done on gender diversity in management by the SKEMA Business School found that ‘feminised’ management teams performed better than their all-male counterparts during financial crisis. Michel Ferrary, professor of Human Resource Management at Skema, revealed that investing in companies with management teams which consist of at least 35% women considerably improved investment performance between 2007 and 2012. While we at Female Breadwinners wouldn’t consider a management team of 35% women to be a ‘feminised’ workforce we are delighted to see more evidence that gender diversity leads to better stability and bottom line results.

Professor Ferrary followed the stock performance of each company in the Parisian stock index, the CAC40, between 2007 and 2012. He then composed the Femina Index, a separate index of companies which had at least 35% women on boards.  Over the six years, the CAC40 lost 34.70% of its value, whereas companies in the Femina Index lost only 5.28%

An article in the Professional Manager on women in leadership commented on the research:

“There can be no doubt that the presence of women on boards and in management will limit any natural tendency for all-male groups to exhibit overtly masculine, or risky, behaviour – a restraint that would almost certainly have been rewarded when the bad debts were called in during 2008. In addition, diversity of all kinds would enable multiple viewpoints to be taken on board – including some that would otherwise have been sidelined – and should facilitate better strategic decision-making.”

Similar findings were reported by the Credit Suisse Research Institute in 2012. In their report on the benefits of gender diversity, they found that shares of companies with women on boards outperformed comparable businesses by 26 percent worldwide. The net-debt-to-equity ratio at companies with at least one female director was 48 percent, compared with 50 percent at all-male boards.

The study also showed a faster reduction in debt at businesses with women on board during the global economic slowdown. Michelle Lamb, author of the study, said in a report, “Multiple academic studies have concluded that diverse corporate boards exercise more diligent oversight. They have better attendance records than homogeneous boards, and they invest more effort in auditing when the complexity of the business warrants heightened scrutiny.”

Hopefully, these statistics will push the UK Government and business groups to develop policies that will bring more women into boardrooms. The glass ceiling must be cracked if we want to remain competitive in the global economy.

gender salary divide

Is appetite for gender diversity at the top waning or increasing?

When I talk with male business leaders, I am struck by how many recognise the value in having women in senior leadership positions. My role is decreasingly about highlighting the benefits and increasingly in talking about which concrete actions and what types of organisational culture change will make the difference. However, this momentum is patchy, and occasionally I hear people protest that ‘women’s issues’  in the workplace are just a passing fad, to be replaced soon enough by another ‘special interest group’. It’s enough to wonder why women, who make up over half of graduates and half of the workforce continue to be seen as a ‘minority’. Why do some companies ‘get it’ and others think of it as yesterday’s priority?

For example, evidence suggests the momentum is slowing on real action to improve gender balance across Australian workplaces and in its boardrooms. The 2013 Directions Report by Asian law firm King Wood Mallesons found that only 13 per cent of directors considered diversity to be a key priority when considering board appointments during the past 12 months compared with 63 per cent in the 2011 report. The explanation is that many boards think they have sufficiently addressed diversity over the past few years, though the numbers of women on boards demonstrate not much progress has indeed been made. Perhaps, because they now are required to publicly report on their gender make-up and cite action they are taking to increase female representation, they feel that the issue will reconcile itself in time.

Certainly, this is not an issue that will reconcile itself without plenty of attention. Indeed, in the UK progress has faltered. As described in the Financial Times this month: The percentage of women on the boards of the UK’s biggest companies has fallen for the first time since the figures were first compiled in 1999, amid worries that the government will fail to hit its target of 25 per cent in 2015. The percentage of women on boards of FTSE 100 companies fell to 17.3 per cent in March in a sign that enthusiasm among the UK’s biggest companies to promote diversity is waning, says BoardWatch, the group that compiles the figures.

Concerns that progress is stalling has prompted Vince Cable, the UK business secretary, to write to the seven companies in the FTSE 100 without a woman on their board to urge them to take on a female member and promote diversity. However, a government spokesperson insisted the 25 per cent target should be achieved, adding: “In the last two and half years we have seen considerable progress with the efforts to increase female representation on UK boards.” Although the drop from 17.4 per cent at the end of last year is only small, it is the first time the figure has reversed, sparking a fresh debate on whether quotas are needed to give the diversity campaign more momentum.

Amidst this backdrop and perhaps not surprisingly, the topic of women on Boards was again addressed at Davos this year at the World Economic Forum.  The World Economic Forum Global Gender Gap Report demonstrates a strong link between closing the gender gap and improving economic competitiveness and corporate performance. The panel, included heavyweights such as Christine Lagarde, Sheryl Sandberg and Viviane Reding. They recognised that real progress has been made in increasing the number of women in top economic positions, including more women on boards and in high-level management. However, statistics around the world indicate that we are still far from closing the economic gender gap and progress remains slow. It’s an hour long video, but worth it to hear some of the most impressive minds discuss progress and remaining barriers. You can check out the panel discussion here.

Is the ‘Emotional Work’ of Women in the Office Undervalued?

I recently spoke with a male client about how he envisaged an office with more women. He leads an IT team, and had never in his career worked with more than a handful of women at once, so this was an exercise in imagination on his part! He started by talking about added innovation and creativity, but then mentioned a routinely undervalued factor in the modern workplace. He admitted: “I think it would just be more social and my team would probably be better behaved!” These are all good reasons to ensure your team has a balanced mix, as diverse teams are indeed more fun and innovative. However, this X factor of sociability is not valued monetarily. This “sociability element” is seen as additional benefit – but not something worth paying for.

Improving camaraderie is not valued as an additional skill set precisely because women do more of the “emotional labour” involved in a smooth-functioning team. This point was brilliantly explained by Lauren Bacon in a piece entitled“Tech Companies: Stop Hiring Women to Be the Office Mom” for the online magazine Quartz.

Lauren Bacon, an internet entrepreneur, also hears from male colleagues how they appreciate the ‘civilising effect’ of women. She began to notice this pattern with a male boss who was technically competent but lacked EQ. Instead he hired women around him to improve the office atmosphere. Bacon explains:

“Now, the thing is, looking back on it, I can see that he genuinely wanted his workplace to have those things, and he didn’t know how to do that himself, so he hired someone (female) to do it for him. I think he really did value her emotional labor, in his way. He just didn’t have the awareness to appreciate that a) women don’t want to have all the emotional needs of a workplace delegated to them; b) emotional rapport cannot be the sole responsibility of one person (or gender); c) I’ll bet you dollars to doughnuts that this woman didn’t have ‘coordinate everyone’s lunches and facilitate office conversations’ in her job description; and d) I feel pretty confident she was not given significant financial compensation for those aspects of her work (even though it sounds like those skills were rare gems indeed amongst her coworkers).”

She describes:

“the problem is that while the outputs (better communication, better self-care, a stronger team) are valued in their way, they aren’t valued in visible ways that afford women prestige. The parallels with women’s un(der)paid and often-invisible labor in the domestic sphere are perhaps too obvious to warrant spelling out, but I’ll go ahead anyway: Because we live in a culture that undervalues emotional and domestic labor, a significant portion of “women’s work” (like childcare, food preparation, housekeeping, elder care, and social planning) is uncompensated. And as a result, if you want your company to have someone on staff to ensure everyone is happy, well fed, and comfortable, you will likely hire an “office mom”; that person is overwhelmingly likely to be female; and she is almost certainly underpaid (and afforded less prestige & power) compared to her technical colleagues.”

This wouldn’t be a problem in and of itself-and I’ll be the first to admit that it is damned hard to hire women into technical roles, as I learned first-hand when hiring coders myself- except that there are a couple of complicating factors:

  1. Coders are lionized in the tech sector, and are compensated for their technical skills with higher wages and positional power – so women without coding experience are automatically less likely to advance to senior positions or command the highest salaries.
  2. There is a culture in tech companies that simultaneously reveres the “user” (at least as a source of revenue and data) and places low expectations on coders to empathize with users (or colleagues, for that matter) – creating a disconnect that can only be bridged by assigning user (and team) empathy responsibilities to another department. An extreme example of this is the frequent labeling of brilliant coders as having Asperger’s Syndrome – and the simultaneous absolution of unskillful communication as par for the course.

So long as we accept these as givens, we will continue to see women in tech struggle in underpaid and under-respected roles while men in tech earn far higher wages and prestige. And we will continue to talk about the challenges of communicating “between departments” without acknowledging that those departments are heavily gendered-and that the paychecks are, too.”