East European history creates gender balance in business

10 March 2016 Consultancy.uk

The global average number of women within mid-market company senior management remains relatively low at 24%, while 33% had no women at all in senior management. A new study highlights, however, the length at which historical normative traditions continue to shape female participation – in Russia for instance, where the idea that men and women are equal in work and education was historically firmly held, 45% of senior management positions today are held by women.

Women active in leadership positions has, across a range of studies, been shown to drive up business performance. One report from McKinsey & Company, titled ‘Diversity Matters’, revealed that companies in the top quartile for gender diversity are 15% more likely to have financial returns above their national industry peers; a study from EY, into the utilities industry, found that the top 20 gender parity performers in the industry enjoyed a 1.5% increase in ROE. This is in part, as highlighted by numerous other consulting as well as academic studies regarding women in leadership, the result of providing new perspectives outside of traditional ‘groupthink’ as well as possessing additional leadership qualities.

While the business case has long since been made, changes within the industry appear to be painfully slow. In a new report from Grant Thornton, titled ‘Women in business: Turning promise into practice’, the professional services firm considers, among others, the progress towards equality across the globe as well as how businesses can better build on the promise women have for their bottom line. The report was developed from 5,520 interviews with chief executive officers, managing directors, chairmen and other senior decision-makers from all industry sectors in mid-market businesses across 36 economies.

Women in senior management

Up and out
The report finds that across the globe the number of senior management positions held by women has increased slightly on 2015, up from 22% to 24%. At the same time, however, the number of businesses across the globe that have no women in senior management positions has also increased slightly, up from 32% in 2015 to 33% this year. Across all major economies, the number of senior management roles in the hands of women stood at 22%, while the number of businesses with no women in senior management roles was found to be somewhat higher than the global average, at 39%.

Proportion of senior management roles held by women

Historic normativity
The research highlights considerable regional differences in the number of women in senior leadership positions. Eastern Europe and the ASEAN countries (Southeast Asian nations) have the highest average number at 35% and 34% respectively. Southern Europe and Africa follow, at 28% and 27% respectively. Eurozone countries average 24%.

The research found some interesting data regarding the differences between East European countries, the ASEAN countries and much of the rest of the world. In East Europe, many of the ex-USSR countries that grew up under communist ideas, grew up under the conviction that there is no division between men and women – all advance in society was open to men and women equally. Additional boosts included that it was common for women to receive higher education, including in subjects such as engineering and mathematics, providing a strong basis on which to build a successful career. And there was high-quality childcare attached to most workplaces, overcoming one of the most common barriers to women’s progression in business. The normative conditions have lived on, and now sees more women continue to value themselves as equally adequate for the role of leadership.

ASEAN countries, too, have performed strongly within the metric of senior leadership attainment, in part from their historically agreed on policy direction for gender equality in education and jobs, including the constitution of the Philippines, being implemented.

senior roles held by women by country

Russian parity
The result of the legacy in both Easter Europe and ASEAN is that countries in the region have high levels of female engagement as leaders. In Russia for instance, 45% of senior management positions are held by women, while the Philippines comes in at 39%. Women in Lithuania and Estonia manage 39% and 37% respectively, while Thailand and Indonesia come in at 37% and 36% respectively. China too does relatively well at 30%. On the other side of the scale are predominantly Western European countries, and their historic colonies. New Zealand comes in at 19%, while the Netherlands comes in at 18%. Argentina manages 18%, while India comes in at 16%. Germany has a particularly poor showing, with 15%, while Japan has a total of 7% of women in senior management positions.

Many of the Western European countries that have low levels of women in senior leadership, also have high proportions of companies that have no women at all in senior leadership positions. 36% of companies surveyed in the UK, for instance, have no women in senior management, while in Germany this climbs to 60%.

Reflecting on the difference in leadership, resulting in the disparity, Pamela Harless, Chief people and culture officer at Grant Thornton US, says: “In the US and the UK, societal norms are based around a ‘command and control’ style of leadership. If you look at government structure, direction is often set from the top down, leadership is seen as something that needs to be strong and direct, not collaborative – and that trickles down in the corporate world.”

senior management roles held by women

Management positions held by women
Interestingly, the kinds of roles that women do land when they manage to make it into a senior position, are mostly focused on human resources and finance. Of the women that are at the top of business, only 9% are the top of business (CEO). The suggestion is that few women make it to the strategic side of the business, and thus lack influence in implementing strategies that surpass company groupthink.

Harless adds that, “If we are going to crack the problem of women in business leadership, we need to have more women serving in truly operational leadership roles. Women shouldn’t just be in support roles such as HR and marketing but owning profit and loss lines and driving the operation of the business.”

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Women remain underrepresented in UK's hospitality industry leadership

12 April 2019 Consultancy.uk

Female engagement at the top level of the UK hospitality industry is still lagging, with the vast majority of decision-making roles continue to be held by men. Only 7% of the industry’s FTSE 350 CEOs are women; however, the pay gap in hospitality and leisure is far better than in other industries, at a median of approximately 7%.

The hospitality, travel and leisure (HTL) sector is one of the UK’s largest employers, with 3.2 million people working in its segments. Despite a poor 2018 in terms of tightening consumer spending, the industry is still one of the top sectors in terms of economic activity, hitting £130 billion last year – besting the UK’s automotive, pharmaceutical and aeronautical sectors’ combined activities.

While the industry is one of the country’s largest employers, it still faces considerable issues around diversity at the top. New analysis from PwC has explored the matter, as well what initiatives the industry has engaged to open up its top ranks to a more diverse background.

Female representation at board level for UK companies and HTLs

According to a survey of CEOs, Chairs or HR Directors of over 100 of the most significant leisure businesses across the UK, the hospitality industry has a relatively male-dominated top level. This lags behind the FTSE 100, where companies have female board level representation at 32.2%. Meanwhile, the figure for the combined executive committee and direct reports stands at 28%. This is well above FTSE 250 levels, where female board level representation stands at 22.4% and executive committee & direct reports stand at 27.8%.

For the hospitality industry as a whole, board level representation came in at 23.6%, with FTSE 350 for the industry performing slightly better at 25.1%, while non-listed companies performed considerably worse at 18.2%. The firm notes that the figures hide that while some companies are making strides to improve equality, others are not moving forward – with the positive result reflecting more often the good work of some, while others are not taking the issue seriously in their agenda setting.

Blind spot

The study states, however, that while the overall numbers are relatively strong, the industry has a number of acute weaknesses. These include CEO numbers, with only 7% of HTL FTSE 350 companies helmed by women and 11% of non-listed companies led by female CEOs. Meanwhile, female chairs at FTSE 350 companies for the sector stand at zero. In terms of wider diversity representation, only 1 in 33 leaders at industry companies is from a BAME background.

Pay gap for HTL and hospitality

The report noted discrepancies between FTSE 100 companies and FTSE 250 in terms of improving the number of women at executive level. The majority have met the Hampton-Alexander Review target of 33% women at board level, up from around 25% in 2016. However, the remaining ~40% are not on target, and are unlikely to meet the target by 2020. A similar trend is noted when it comes to executive committee and direct reporting numbers.

Jon Terry, Diversity & Inclusion Consulting Leader at PwC, said, "To make real progress in diversity and inclusion, businesses need to elevate it onto the CEO’s agenda and align diversity & inclusion strategy to the fundamentals of the business."

Tracking progress FTSE 250 level

However, one area where hospitality travel and leisure companies are outperforming other companies in the wider UK economy, is the mean and median pay gap between men and women. PwC found that the median of the wider UK economy comes is approximately 14% – with upper quartile companies noted for a gap of low 20%, and lower quartile companies noted for differences of around 2%.

The median pay gap for HTL comes in at well below 7%, with the median close to parity. There are considerable differences, however, with hospitality at 7%, while travel comes in considerably higher, at 22%. The latter figure reflects fewer women in higher paid pilot and technical positions within the industry.