8 March is the centenary of International Women’s Day. This year, we mark the occasion with a series of blog posts about initiatives to strengthen gender equality worldwide. In this post, Rudolf van der Berg of the OECD’s Science, Technology and Industry Directorate discusses sex discrimination in management.
As we celebrate the centenary of International Women’s Day, in OECD countries still only 5%-30% of senior management is female. This is often discussed in the context of right and wrong. But let’s look at it from the perspective of competences and economic performance.
The argument for there being so few women in management positions is that they just aren’t available and that the best person for the job needs to be promoted. However, with educational equality being the norm and girls and women actually performing better than boys and men in education, this argument seems to hold less than it did a hundred years ago on the first International Women’s Day.
The simple conclusion we have to draw from the numbers is that if competences and chances were distributed equally, we would see roughly 50% women on boards. Unfortunately we aren’t seeing this. We still see far less.
The sobering conclusion is that if our societies were more equal, 40% of the men in some form of management today wouldn’t be in that position. They are not competent enough, given the pool of talented women. However, since managers are continuing the practice of selecting men over women for any management position in the organization, this means they are dipping deeper into the pool of available men and pushing lesser qualified men up to positions they shouldn’t have been in.
The consequence of this is that the position of men in organizations is supported by a whole column of lesser qualified men, crowding out women and in their own self-interest keeping those women out.
That this has negative effects on the performance of companies is clear. In a series of studies by Catalyst, Fortune 500 companies with more women board directors are shown to have significantly better financial performance, including 53% higher returns on equity, 42% higher returns to sales, and 66% higher returns on invested capital.
If shareholder value or government effectiveness and efficiency is dependent upon having the right people in the right place, it is time CEOs and Ministers start looking around and down and wondering which of the men they see in management is the weakest link, and where in the company the more qualified woman has ended up.