In the same way ecosystems with high biodiversity have higher survival rates, businesses with high personnel diversity also fare better than those with one variety of employee. Increased diversity of employees results in a wider variety of thinking, more robust solutions to problems, etc. In the same way, it’s not surprising that evidence has emerged that firms do better with women in the ranks. Evidence also surfaced that female fund managers outperform their male counterparts. In short, women and profit go together.
With powerful findings like these backing them, why aren’t women dominating the business world? Women still lag men in international business management, by all metrics. The nature/nurture debate is alive and well- is the problem that women are taking themselves out of the game, or are they being acted on by forces out of their control? For example, is it that women are out there pitching ideas on Sand Hill Road getting shut down? Or is it that women aren’t out on Sand Hill Road to begin with for some reason?
Pinpointing Causes as a Precursor to Empowerment
I recall an oped by a publishing honcho- either a retired WSJ or NYT editor- where she states that in 30 years, no female employee ever asked her for a raise. That points to women being at fault for their lack of advancement. Yet research from Harvard Business School shows that, when controlling for all factors including the ‘lifestyle choices’ female career inequity is often blamed on (eg taking time off for kids), women from elite business programs are still subject to a structural, quantifiable gender disadvantage.
Some investment banks have taken a smart approach to empowering women by creating funds that invest exclusively in female run businesses. These funds, run by pan-European investment bank Bryan Garnier & Co. and a Swiss investment bank Naissance Capital, address a possible barrier to entry—a capital market that may or may not be affected by sexism.
What’s CSR Got To Do With It?
To the extent that CSR programs are strategic corporate efforts to preempt regulation, incorporating women into C-level and boardroom positions is increasingly a corporate social responsibility issue. Proportions of women in management is likely to be subject to regulation if companies fail to pull it together on their own. Regulation requiring quotas of women on boards has already begun in Europe- Norway requires 40% of board seats to be filled by women. Such laws are also emerging in France, Spain and the Netherlands, with rumblings in the UK.
From a less cynical point of view on CSR, not all CSR programs measure womens’ advancement relative to men in the same company, though they should. Further, women are often not included in diversity programs that focus on recruiting ethnic variety, though the best diversity programs (CVS, looking at you…) covers ethnicity, gender and age. To this end, the CSR community needs to push for transparency and standards that measure organizational gender parity.
Remembering Ann Hopkins
Although quotas like those being implemented in Europe are typically derided in the US, a case from the late 80s—PriceWaterHouse v. Hopkins—creates a question as to whether a quota policy isn’t justified. In the case, Ann Hopkins was rejected for partner at PWC. Despite being eminently qualified, her rejection was based on her apparently forthright and confident demeanor, which ran counter to male partners’ documented expectations that she be more ladylike, pretty, and attend “charm school.” Although we may want to hope Ms. Hopkin’s experience is behind us, a recent Above The Law post described a sad report on the state of women in large law firms: high attrition, universal reports of harassment and bullying. How far have we really come when it comes to positions that matter?
One commenter responded to the Above the Law post with something like “Why don’t women start their own firms if they’re so unhappy?” It’s true; more women need to start firms to help push the business world to a level of fairness and inclusion that they are satisfied with. However, getting women into positions of business leadership does require men that recognize discrimination as a real, common and unjustified barrier to entry. But more importantly, it requires women who foster leadership in themselves and in culture, who recognize their own value and communicate it, and who do not shy away from capital.