In June 2016, Oliver Wyman, the global management consultancy, released its second paper on women’s progress in the financial services sector. The report includes an analysis of 381 financial services organisations globally, including South Africa, and found that at the rate of current progress, executive committees in financial services industry globally will only reach 30% female representation in 2046.
Shocked yet? 2046! How is that possible? Depending on which study you read, women in open economies make up between 47% and 51% of the workforce, so why would they only get to 30% of leadership positions in 30 years’ time? And why is it important that they do?
I am often asked to cite the business case for why we need more women in leadership, and I can and I do and its compelling – but quite frankly I find the concept totally ridiculous. We need a business case for more why we need more women in leadership just as much as we need a business case for having girl children or women as life partners.
The more appropriate question is: “what could the business case possibly be for not having gender equality in leadership?” How can it ever stack up that a team leading a business of 50% women employees or in a world where (according to Bloomberg) women make up 85% of all consumer purchases – can not be at least 50% women? The global incomes of women are expected to reach an incredible $18 trillion by next year according to Ernst & Young. The question really should be “how have we managed to be successful without women on boards for this long?” or more importantly “are we really as successful as we could be?” or “how sustainable will we be without appropriate representation on our board?”
The Oliver Wyman survey showed that women enter the financial services industry with the same ambition level as men, retain this ambition for the first years of their career, and usually also have similar ambition later in their careers (a McKinsey study had very similar results). However in mid-career, a significant gap opens between men and women. Why? It seems that women are less willing to make sacrifices in their private lives and more in their career ambition levels. It is at this point in their career that women vote with their feet. Labour market data from Mercer showed that the exit rates of women in financial services in that essential point in their careers are not only higher than those of their male colleagues, but also significantly higher than in other industries. In financial services, senior women are 20 percent to 30 percent more likely to leave their employer than their peers in other industries.
Why do women leave? There a multitude of reasons, bias, unequal opportunities, inflexible work environments – but most importantly it’s because they choose to. Women more than men, choose a different life for themselves. According to the Pew survey, 51% of women have interrupted their careers for family, and those who chose this route “overwhelmingly say they are glad they did this, even though a significant share say it hurt their career overall”. Harvard Business Review, writes that they found that “men and women have different preferences when it comes to achieving high-level positions in the workplace. More specifically, the life goals and outcomes that men and women associate with professional advancement are different.”
You get it don’t you? Because it’s not just women that want to make these choices, in an ironic twist of fate, women just get to make the choice more than men do because it’s expected.
Sheryl Sandberg’s quotes, “In a survey of 4,000 employees at big companies, 36% of men said they want to be CEO. Only 18% of women said the same.” Now this is a problem if women aren’t saying they want to be CEO because they think “that’s not what women do,” or that they shouldn’t bother to want it because it’s not possible. But which is it? The reality is that it is both. Some women don’t see being the CEO as the definition of success and for many other women the option just isn’t available.
Neither are these are good for us in business! We know the business case just isn’t sustainable…something has to change. We know we need more women on boards. We know more women are leaving because they choose to – when we need them the most. Perhaps it’s time to start thinking of some new definitions – what is success anyway?
Arianna Huffington, in an interview with Forbes, discussed the need to focus on a third metric of success. The traditional definition of success, according to Arianna has become that of wealth and power: “Over time our society’s notion of success has been reduced to money and power. In fact, at this point, success, money, and power have practically become synonymous in the minds of many. This idea of success can work—or at least appear to work—in the short term. But over the long term, money and power by themselves are like a two-legged stool—you can balance on them for a while, but eventually you’re going to topple over. And more and more people—very successful people—are toppling over. To live the lives we truly want and deserve, and not just the lives we settle for, we need a Third Metric, a third measure of success that goes beyond the two metrics of money and power, and consists of four pillars: well-being, wisdom, wonder, and giving.”
And why is being on a board synonymous with sacrifices that modern people just aren’t willing to make? Why does being in leadership equate to power and money? Perhaps we need to go back to the basics. Perhaps we need to go back to the principles of governance and leadership.
According to the King code on corporate governance, Corporate governance is not presented as an end in itself, but rather a means towards realising certain benefits, or governance outcomes: ethical culture, good performance, effective control and legitimacy. In essence, King IV promotes the view that achieving the aspirations as expressed in the principles optimises organisations to realise the governance outcomes. Ethical leadership is exemplified by integrity, competence, responsibility, accountability, fairness and transparency (ICRAFT). Effective leadership is results-driven, but goes beyond an internal focus on effective and efficient execution. Ethical and effective leadership go hand in hand, the one reinforcing the other. This doesn’t sound like power and money to me!
Board representation is at its core an act of service not one of power and money. It also seems clear that a people with balance and all the pillars of personal success are exactly the kind of leaders we need in board positions.
Seems like we need to write another new chapter in that way of work. It’s time to change perceptions about what leadership means. It’s time to actively bring women into these roles. We absolutely need to change our workplaces from within to create places where women can thrive and enjoy the success they require for themselves. But we also need to change the way we see leadership – from being that of money and power, to being an opportunity to serve our employees, our stakeholders, our world. Maybe then women will stop being bored with boards?