Last month, G20 heads of State and Government gathered in Indonesia to discuss how their countries will “Recover Together, Recover Stronger” from the current socio-economic challenges. In this important group – representing 60 per cent of world population and 80 per cent of global GDP – only one head of a State or Government was a woman.
This situation is not surprising as only 28 countries in the world have a woman head of State or Government (as of September 2022), and only 21 per cent of government ministers are women. Additionally, women ministers tend to cover social and family related issues, while men ministers lead 79 per cent of the ministerial portfolios that require decisions on government budget, economy, business and infrastructure and so on. This norm has spilled over into the private sector where only 4.8 per cent of the world’s largest business are run by women CEOs (Fortune Global 500 list, August 2022).
On 3 November 2022, UN Women, in collaboration with ExecuShe, convened WEPs signatories in G20 countries in a virtual meeting to share their solutions for advancing women’s leadership in the private sector. ExecuShe presented its recent research illustrating the situation in G20 companies, that is, 17 per cent women in corporate leadership with only 11 per cent of power. The research findings showed that we have a lot of room for improvement and a long journey ahead to reduce the gender power gap. The WEPs signatories’ stories informed us that the journey is not straight forward and easy and that it is an ongoing process to achieve results.
What does the data say?
“We call it the gender power gap […] measuring the voting power disparity in executive decision-making”, explained Bess Hsieh, Head of Financial Data Science at ExecuShe. “This should be distinguished from gender diversity ,which “measures the presence of women at the top executive level at the top executive table by headcount”. ExecuShe researchers explained that among top companies in the United States, women in executive c-suite positions only control roughly 1 per cent of company shares held by executives, and sometimes even less. It means that women have significantly less influence on a company’s decision-making process as 99 per cent of the decision-making power are held by men.
“Let’s use an average power share from a tech company as an example. A typical CEO from a tech company holds – on average – 56 per cent of decision-making power in the company, while the chief financial officer holds 12 per cent, the chief technology officer 11 per cent and the chief business division officer 11 per cent. The chief human resources officer holds only 4 percent of decision-making power”, explained Professor Andreas Hoepner, Scientific Advisor at ExecuShe. If a woman holds any of these roles, it would be most likely that the woman is chief human resources officer with only 4 percent of the decision-making power. “That is why we do not only need more women in executive leadership positions but we also need women to hold equivalent power as men so that these women have their voices heard”, continued Professor Hoepner.
Professor Hoepner added that this gap is real in G20 countries, as 95 per cent of the executive chair positions in major companies in G20 countries are held by men. Women hold leadership roles such as chief diversity officers, and chief human resource officers – positions with much lesser decision-making power than CEO or Executive Chair, which jointly often hold more shares than all other executives added together. “Essentially, gender diversity measured by headcount is just the “gross” number, we need to achieve gender parity “net of power” to truly allow women equal say in corporate decision making”, Hoepner concluded.
Three key ingredients to advance women’s leadership opportunities – What did the WEPs signatories say?
What were the secrets to successfully have achieved 30 per cent women in leadership according to WEPs signatory representatives? Five panelists - representing Continental, ICL Group, GoTo, Natura & CO - share their stories. While the details varied, they all highlighted three key secrets to advancing women's leadership opportunities:
Key 1: Measure and set targets
“Currently, we have more than 40 per cent women in our executive board. To achieve this, we set targets and made the management accountable for the gender KPIs”, said Julia Weinz, Manager of Diversity and Talent Management at Continental. Natalie Deacon, Head of Corporate Affairs at Natura & Co. reinforced that “Measurement is the key – what gets measures gets done. It has helped us to understand what is the issue that prevents us from having more women leaders, and what works to promote women.” Cindy McLeod, Head of Social Impact and Inclusion at GoTo, highlighted the company’s new gender pay gap audit that reviews relevant gender policies and practices.
Key 2: Raising awareness about gender equality and take the issue seriously
Raising awareness involved continuous communication on the importance of institutionalizing gender equality in corporate cultural and business practices. Everyone needs to understand that gender equality is good for both women and men, and for the business and the broader society. Including and engaging men in the dialogue was therefore emphasized as key for success.
Communication efforts also involved incentivizing managers to tackle unconscious bias, understand the data, and ensure consistency in corporate policies and practices. Ilana Fahima, Chief People Officer at the ICL Group stated that gender equality is a key part of ESG, but not yet part and parcel of ESG discussions. “It should be on the table and discussed as any other ESG strategy. Raising awareness internally is important to make everyone accountable and realize that we have an issue.” She added that gender equality should be dealt with within the larger diversity and inclusion agenda.
Key 3: Listen to the needs of women in all their diversity and provide support that they need
One way to listen to women’s needs is through deliberate consultations and action. Other examples provided to support women included mentoring and sponsorship opportunities. Dharshni Padayachee, Transformation, Equality and Inclusion Lead at RMB, emphasized the importance of providing sponsorship to women. She explained the difference between mentorship and sponsorship as “Mentorship is learning from someone’s experience, but sponsorship is when somebody is speaking up for me – saying my name when I am not in the room and putting me forward for opportunities when I am not there.”
What could your company do to advance gender equality and women’s leadership?
A good way to start for your company is to gather data. It will help your company to understand what is happening in your organization, and which area is working well, and which area needs more support.
If you want to learn more about this event, watch the full recording of the webinar here.