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WOMEN IN BUSINESS: Slippery top floor

September 22, 2014
Diversity & Inclusion

Women’s Month could not celebrate an increase in the number of women executives in SA this year, yet we could be reaching a tipping point, writes Andiswa Maqutu

ALMOST a century after the suffragettes won the vote for women in Britain — a right soon adopted by a number of other countries — women’s progress has been remarkable in some spheres but disappointing in others, notably at senior levels of business.

With the onset of World War 1 the glass ceiling that had confined women to the role of homemaker lifted from ground level as many of them joined the workforce for the first time and contributed to the war effort. Grudgingly, men’s attitudes began to change as women, later spurred by the feminist movement, pushed for equality in the workplace and women’s liberation in general.

Today, the daughters and granddaughters of those bank clerks and locomotive dispatchers who started work in 1914 face a glass ceiling at a different level.

For black women in SA, they are often the daughters of domestic workers, nurses and seamstresses.

“My mother said it would be black women who would liberate white women,” says Sonja De Bruyn Sebotsa, founder of Identity Partners and former vice-president of investment banking at Deutsche Bank SA. “And if we look back, that is true. There was no talk about gender before we dealt with issues of apartheid. By black women empowering themselves, they also empowered white women. And there are probably more white women executives than black women executives.”

Women make up over half of SA’s population and 42% of the working population — just about the proportion in parliament and cabinet achieved since 1994, with the advent of democracy and a liberal constitution. However, the struggle to achieve parity between the number of men and women at executive level continues.

More than a fifth of SA’s businesses still have no women at all in senior management, research by financial services firm Grant Thornton states. For those that do, the number of women in senior management decreased this year to 26% from 28% in 2013. The percentage of women at senior level has remained stagnant at this level for the past 10 years. This suggests that for those women who do break through to senior management, a slippery glass floor of challenges awaits them. Some, however, believe the decline reflects a drop in the pressure to transform in the past decade.

Of the 400 companies listed on the JSE, only 4% of CEO/MD positions are held by women, according to the Businesswomen’s Association of SA (Bwasa). Women hold a mere 5,3% of chairman’s posts and only 15,8% of directorships. Nicky Newton-King is CEO of the JSE and Barclays Africa CEO Maria Ramos is the only woman heading a top 40 JSE-listed company.

JSE chair and former ArcelorMittal SA CEO Nonkululeko Nyembezi-Heita says though it can be expected that women will in time comprise a higher percentage of corporate leadership roles, there are few CEO positions available, even for men. She thinks women are likely to take the lead in startups, often as founders of new businesses, faster than in established businesses.

“There are so few corporate positions at that level to begin with,” says Nyembezi-Heita. “And if we think about how many men as opposed to women there are in the workforce, and how long they have been at it, few men make it. [And so] few women are making it into what is already an exclusive club.”

Yet compared with the European Union and the US, SA companies are doing slightly better. Only 23% of senior management positions are filled by women in the EU and 22% in the US, despite these nations driving mainstream talks about gender diversity, Grant Thornton observes.

However, SA companies are quite some way behind their counterparts in Brazil, Russia and China (the Brics club), as well as other emerging nations.

The number of women in senior management roles in Bric companies has grown by 4% overall, to an average of 32%, led by Russia with 43% and China’s 38%. India, at 14%, has the fewest.

Developing nations tend to have more women in senior management partly because of a lack of skills in these nations, says Amrop Landelahni, an executive recruitment agency focused on the continent. Educated and skilled women are in demand in most emerging markets, whereas there is a surplus of skilled people in developed markets.

This could be why the Brics outperform the US and EU when it comes to women in senior management.

However, in the EU and Germany there is a move towards implementing quotas to increase the number of women at executive level and speed up the equality process. An increasing body of research shows companies that are more diverse and have more women on their boards outperform those with uniform teams.

“Women bring a different perspective to issues and because diversity makes companies more representative of the world around them, it has profound implications for relationships with stakeholders,” says Ramos. “What is clear is that diversity offers companies a competitive advantage.”

As companies look to emerging markets for greenfield development and growth, a diverse leadership team is a competitive advantage and business imperative.

Women own half of all businesses in emerging markets — and about a third globally, says professional services firm EY. A company with an executive team that matches its geographical footprint will outperform those with more uniform leadership teams, research by consulting firm McKinsey shows.

Last year EU MPs voted for a draft law mandating a 40% female quota for nonexecutive board posts. In Germany, the two parties slated to form the next government have agreed to push for 30% of positions in supervisory boards of listed companies to be reserved for women.

In contrast, SA seems to be shying away from executive quotas. Earlier this year, women’s minister Susan Shabangu withdrew the Women Empowerment & Gender Equality Bill for further consultation. The bill would have required SA companies, including listed companies, to have 50% of their executive positions filled by women. It was met with strong resistance from business and opposition parties. Business Unity SA described the bill’s 50% target as “unrealistic and unattainable”.

The concern has been raised that without greater diversity at the top, SA companies might be less competitive than those in other emerging and developed nations.

This month, the department of trade & industry, in partnership with BPW, a manufacturing company, launched the country’s first database of “board-potential women”. Companies can use this untapped pool of women to fill board positions.

At lower levels of an organisation, staffing tends to reflect a company’s geographical footprint. However, once through today’s glass ceiling, women continue to face challenges. This is why the efficacy of quotas at executive level is questioned: they may be too late because mentoring and other support (such as crèches at work) needs to start at lower levels, says Grant Thornton.

Of the 900 000 students enrolled in higher education institutions in SA in 2011, 58% were women, according to the department of higher education. So the female intake is more than adequate. The number of women in various faculties such as accounting, engineering and information & communications technology has increased.

However, it is at middle-management level that women encounter the most career resistance. This is also evidenced by the number of women at business schools.

MBA students are required to have a number of years of work experience, with the average age for doing an MBA being in your late 20s. This is also the age when women are considering starting a family — which is probably why barely a third of the country’s MBA students are female. Women, including those at executive level, also have to balance career demands with being a mother and/or wife.

Newton-King says women tend to reach a stage early in their career where they have to choose between staying in the workplace and going home to look after children. And so they consciously step back at a time that is the most critical for career development.

“Your first seven years in the workplace are really important formative years in building your expertise, how you conduct yourself and model what you see. Then you start to move up the ladder. And if at that stage you step out, coming back later is quite tricky,” she says.

Last month, Cosatu gender forum chair Sharone Daniels called for companies to adopt the Pick n Pay model of granting women 11 months’ maternity leave instead of four months. This comes as more women call for more time off work to bond with their children. Nine months of Pick n Pay’s 11 months’ maternity leave is paid leave.

Daniels says the current legislation was written without consideration for women in the workplace, as though they were expected to be “chained to the stove”.

About 45% of SA companies give working mothers access to continued professional development and education during maternity leave and reserve job roles for women for up to a year, says Grant Thornton. In China, incidentally, the one-child policy has lowered the burden of child care, says Grant Thornton SA deputy CEO Jeanette Hern. This, together with rapid urbanisation having raised women’s aspirations, explains why Chinese women make up 38% of senior management.

Russia’s relatively high 43% is put down to the old Soviet Union’s emphasis on gender equality and the promotion of women into top roles in the service sector which, globally, is surpassing male-centric industries such as mining in employment.

Hern says schemes that are most essential for women, such as a crèche at work, are not common in SA. “Only 7% of SA companies offer on-site child-care facilities; however, the global average is just 6%.”

The uncertainty women feel about their career prospects in a male-dominated environment also affects whether they choose to return to work. “Sometimes the workplace is not compelling them to come back,” says Newton-King. “The corporate world is very uncompromising in how it allows women back,” says Sam Deuchar, CEO of Rebmormax, an executive recruitment agency.

Another challenge facing potential and existing women executives, as well as black male or female candidates, is the “just like me” syndrome — a corporate culture where people who reflect the incumbent executive team in gender, race, schooling, background and social activities tend to be the only ones considered for promotion to the executive.

“There are some organisations where the executive team cycles, for example, or are sports fans. If you don’t do that, you don’t fit the culture,” says Deuchar. “A team that is almost identical in race, [male] gender, qualifications, schooling background, university and interests — the just like me syndrome — makes it feel like you know each other. There is a comfort in that, it’s easier for them. Those are the things you’ve got to be careful of.”

But company culture is not the only difficulty female executives face; some challenges are brought on by the career choices women make. Women are more inclined to pursue “support” roles than first-line management roles. Human resources director, financial director and marketing director are the most common support function roles women take on at senior level, Grant Thornton finds. Support roles disadvantage women because CEOs are more likely to be chosen from line functions, says Nyembezi-Heita.

“There are a lot of women coming up the ranks but in support roles. And CEOs typically are drawn from line functions,” she says. “We are never going to fundamentally change this thing with support roles. A line function puts you directly in the line of fire and directly in risk mode as you go higher.”

In SA, women hold 27% of all human resources director and 14% of chief marketing officer posts. Women also hold 27% of CFO positions, due largely to an increasing number of women qualifying as chartered accountants. Females now make up 58% of all accountancy graduates (up from 50% in 1999), says Amrop Landelahni.

“We need to break the mind-set that says if you have a woman at the table, she needs to be head of your people and culture or marketing,” says Hern.

The way women tend to approach management could be one of the reasons they gravitate towards or are steered into support roles. Women tend, more than males, to have a consultative management approach, which seeks to form fewer but deeper relationships and to seek advice of peers and colleagues. But they can also be penalised and viewed as weaker for not conforming to the more “aggressive” management style characteristic of organisations run by males only, says Nyembezi-Heita. And though the more consultative and participatory approach associated with women is best suited for transformational leadership, it can be perceived as weak by both men and women in the workplace, she adds.

“There is at the top an expectation in the workplace — because it evolved around preferences of male leadership styles — that once you get to CEO level, you are prepared to exercise power in an aggressive way,” Nyembezi-Heita says. “Women, broadly speaking, tend to not like that style. So even when they make it to CEO level, their peers, both men and women, feel they are not sufficiently aggressive. I think that is where prejudice [against female CEs] comes in.”

Says Bwasa president Liepollo Lebohang Pheko: “Our management style and acumen are very different to those of men. There’s an assumption that masculinity brings capacity and ability, but it is by no means always so.”

But women may not be adopting a consultative approach by choice. Research shows that because of male prejudice and being seen as not belonging, women have to adopt softer management and negotiation styles. University of Michigan academic Mary Sue Coleman calls it being “relentlessly pleasant” in talks. Coleman says women have to smile more frequently, express appreciation and concern, invoke common interests and emphasise larger goals.

When women are perceived as weaker, not only are they deemed not to fit in with the male executive team and therefore less likely to be promoted to it, but they are also likely to be paid less for the same work.

It will take 50 years for the salaries of women executives to match those of male executives, says Amrop Landelahni.

This is one of the ways “the corporate world masks inherent discrimination”, says Pheko. Women are also likely to be put in perpetual mentorship that rarely translates into a leadership role, she adds.

This creates the perception that they are less valuable and makes women less likely to be considered for leading roles in the company. Other ways women are discriminated against are through job titling and loading, with more responsibility than the title implies.

Women executives in SA earn 28,1% less than men as measured by taxable income, and are liable for 47,1% less tax than their male counterparts, according to PwC’s executive directors’ remuneration report. This means a man earns in eight months what a woman earns in a year, says Amrop Landelahni CEO Sandra Burmeister.

In the UK, women executives on the FTSE 100 are paid 35% less than their male counterparts. At retirement, men will receive on average £400 000 more from pension payouts than women, according to a report by The Guardian.

“When we look at the basic rate for a job and we look at the key components of a job, it often emerges that women are paid far less for doing the same work and sometimes even more work,” Pheko says.

“Also, women are always in development, always on their way up. Always need to be mentored and always being groomed but never having arrived. You are an assistant director, junior manager, assistant engineer. Obviously these things play into the salary expectation that one has.”

However, Newton-King believes that in SA “the board will pay what the CEO is worth” and that discrepancies could also be a function of the amount of time women spend at a particular company.

The right company culture can increase the number of females in an organisation, particularly those wanting to start families. Newton-King says over 50% of the JSE’s 500 employees are women and the executive team comprises nine women and three men. “We are at a tipping point at the JSE. As we attract more women, other women look at it as a place where they might want to work,” she says.

Nyembezi-Heita echoes this, saying the transformation of the workplace will take time as the number of women increases to give them the “critical mass” needed to make significant changes.

“It looks like nothing might be happening, then you reach a tipping point and suddenly there’s a huge change. And in my mind, that is what we are going to see.”

Wiphold founder and executive director Gloria Serobe says diverse executive teams should make a point of demanding to see more “transformed” senior management at the companies they deal with: “For me, it is no longer acceptable to come see me with an entire rugby squad; there must be women in your team.”

Source: Financial Mail

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