Getting Real about Gender Balance
Potential vs Reality
Business leaders, economists and the media are contributing to a growing chorus: acknowledging the economic opportunities in improving the gender balance in business. But there remains a wide gap between recognising the benefits and actually implementing the reality.
POTENTIAL FIRST
Recently, the argument that women represent a huge business opportunity in terms of talent and markets is heating up.
Newsweek ran a cover story (Sept 21st) called The Real Emerging Market that states that “in the last few months, economists, consultants, and other business types have begun to track the rise of a new emerging market, one that may end up being the largest and most powerful of all: women.”
Goldman Sachs published a report in August called The Power of the Purse. It says that “over the next five years, the combined impact of growing gender equality and the emerging middle class will be seen most clearly in China and Russia, and to a lesser extent in Vietnam, Mexico, Brazil and Indonesia.”
Then Harvard Business Review chimes in with a feature on The Female Economy reminding us, in case we haven’t heard it enough, that “women now drive the female economy… control about $20 trillion in annual consumer spending, and that figure could climb as high as $28 trillion in the next five years. In aggregate, women represent a growth market bigger than China and India combined — more than twice as big, in fact.”
NOW, THE REALITY (& HOW TO MEASURE IT)
So have companies acknowledged this shift… and its implications for their customers, products, services and images?
Not yet, is the short answer. Products and services still don’t fully understand or respond to the women that women have become. And employers have not adapted their cultures and systems to the massive arrival of women in their talent pools.
There has been a lot of attention over the past 5 years on the gender balance of corporate boards. It’s time to move beyond this level. The real indicator is the gender balance on the Executive Committee – the core metric of competitiveness.
INTRODUCING 20-first's WOMENOMICS 101 SURVEY
That is why we have launched a new annual report: 20-first’s WOMENOMICS 101 Survey. To get down to basics.
THE CORE METRIC: EXECUTIVE COMMITTEE GENDER BALANCE
Every year, this will list the top 101 Fortune Global Companies in each key region and reveal the gender balance of their top teams, providing a crucial snapshot of their true success in this area.
Why this metric?
The focus on the boardroom has been helpful in raising the visibility of the gender issue. It was an easy-to-understand and easy-to-measure reading of gender balance (or the lack thereof) in business. Yet it is not the best indicator of how gender balanced a company actually is in 2009. Nor of how gender balanced they will manage to become tomorrow.
As companies have discovered, it is much easier to appoint a woman or two onto a corporate board than it is to actually groom a woman for power and have her progress through the traditional, internal route to the Executive Committee.
Boards are oversight bodies. They do not actually run companies. So getting more gender balance at board level does not have a very direct impact on the gender balance of the organization as a whole.
It’s time to look deeper into companies, and find metrics that distinguish those serious about gender balance from the rest. That’s what Womenomics 101 proposes to do every year from now on.
“Only a dozen companies out of 303 achieved a critical mass percentage of 30% women on their Executive Committees, which studies have shown is significant if companies want to create more effective leadership teams. They are all US-based and three of them are run by women CEOs – WellPoint, Kraft Foods, and Archer Daniels Midland.”
KEY FINDINGS
- US Leads: The US is ahead, with just over half of the companies surveyed having one or two women at this level. The American companies with the highest number of women on their executive boards are: Kraft Foods, WellPoint, Macy’s, Allstate, Pfizer, and Wells Fargo.
- Europe and Asia Lag: Both Europe and Asia have barely embarked on the gender journey. 82% of companies in Asia and 68% of companies in Europe have no women at all on their Executive Committees.
- Women promote women: Only a dozen companies out of 303 achieved a critical mass percentage of 30% women on their Executive Committees, which studies have shown is significant if companies want to create more effective leadership teams. They are all US-based and three of them are run by women CEOs – WellPoint, Kraft Foods, and Archer Daniels Midland.
- Lack of Women in Operational Roles: The majority of women promoted to the Executive Committees of the surveyed companies are in support roles (76% in the US).
20-first's WOMENOMICS 101 Survey, 2009
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