28 September, 2020

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Gender And The Executive Suite

By Charitha Ratwatte –

Charitha Ratwatte

Charitha Ratwatte

The four main Nordic countries – Denmark, Finland, Norway and Sweden (the Vikings) – lead the world in social indicators on factors such as global ranking in happiness, competitiveness, the best place to be a woman and even the best place to be born. These achievements are admired the world over, especially the Vikings’ ability to remain competitive on a global scale and sustain a generous social welfare system.

However, the recent global financial crisis has raised concerns on the sustainability issue. Analysts state that the Nordic model rests on three main principles: equality, trust and collaboration. The history of the model goes back to at least the 1890s when the four countries first introduced comprehensive social insurance laws on which foundation the later evolution was built.

Another milestone was the 1938 Swedish accord on the consensus driven approach to labour relations. The results have been impressive, especially on gender-based participation issues. One half of Finland’s Cabinet ministers and 57% of Sweden’s ministers are female. The World Economic Forum’s Gender Gap Index awards the first five places to the Vikings. Iceland is first, closely followed by Finland, Norway, Sweden and Denmark.

The Vikings also started a revolution in being the first to introduce mandatory quotas for women in executive suites (on corporate boards) of listed companies. Norway, which kicked off the process initially, today requires stock market listed companies to allot at least 40% of seats in the executive suites to women. Iceland, Finland and some other non Viking European countries have introduced similar provisions.

Nordic countries

However, the problem is that in a typical Nordic company, the senior managers below board level are still mainly men. The egalitarian flame, so admired in other levels of society in Viking countries, splutters and dies out at the second rung of top management and below. Research has shown that the women found at that level in offices are mainly personal assistants of the male bosses.

The World Economic Forum ranked Denmark 72nd, comparatively, in terms of the gender gap at the senior manager level. Further among the Vikings, the CEO who runs the show is almost always a man. In 2013, in Norway only 6% of listed firms had a female CEO. In the USA, only 6% of the Fortune 500 listed companies have a female CEO.

Opinion is divided on why, given the lack of a gender gap in other sectors, the head honcho CEO positions are so male-dominated in the Vikings. A study by an academic at Aarhus University in Denmark on private businesses raise the possibility of a Scandinavian-style generous social policy can have unexpected negative consequences.

First, generous maternity leave encourages Viking women to stay away at work at a young age, while their male counterparts are outdoing them, on the aspect of gaining practical experience in the office. Second, since generous social benefits have to be paid by higher taxes, domestic help for taking care of children may very well become unaffordable.

The Viking public sector, on the other hand, provides women with child-friendly flexi hours and extensive family leave, etc. This has resulted in there being a larger number of female bosses in government and parastatal agencies. In effect, policies which reduce the gender gap for the mass of women at lower levels may actually result in the gap increasing at the boss level, in Viking private businesses.

Supporters of quotas for women on boards of corporates argue that this is the only meaningful response to a classic failure of equal opportunity. Certainly, in countries such as Norway, the quota has transformed the executive suites by bringing in more female directors. But the downside is that Norwegian companies fled the stock market in droves when a quota for women on boards of listed corporates was introduced. The number fell from 563 in 2003 to a mere 179 in 2008.

Further, a study by the University of Chicago’s Booth business school shows that quotas have done nothing to improve the prospects of highly-qualified women below the board level. Nor has it helped to close the gender gap in incomes of recent graduates of business schools. Also enrolments of women into business schools have not increased. In other words, there has been no trickledown effect of the imposition of board quotas for women.

Analysts have pinpointed the emphasis by selection committees of corporates on continuity of service as the main barrier for female advancement in the corporate sector hierarchy. Women who take career breaks to nurture children or take care of aged parents, for example, are adversely penalised for their gap in working experience.

The experience of the Vikings is that the two main ways proposed to advance women business tried so far – quotas and gender-positive special welfare policies – suffer problems which are opposite to one another. Social welfare policies which favour women are too vague; it makes their lives easier but does promote the need for going up in the hierarchy. The second is too prescriptive; it guarantees the place on the board for a select few women but does not strengthening the career path of women as a group in the business environment.

United Kingdom

One country which seems to be different as far as gender in the executive suite is concerned is the UK. As of October 2014, women held 23% of board room positions in the UK’s largest corporates. The British Government has set a target of 25% by 2015. Vince Cable, the Business Secretary, and Lord Davies, who co-authored a report on the subject in 2011, are pressing corporates to comply with the quota requirement. They say: “Doing nothing is not an option anymore.”

In 2011 the figure was 12.5%. Lord Davies has hailed the achievement: “Progress of this order is by any standard is an amazing achievement.” Between March and October 2014, the percentage of women on London’s FTSE250 companies rose from 15.6 % to 17.4%; 39 companies have now met the 2015 target of 25%, an increase from 36 in March.

The official British Government position on female quotas for corporate boards is: “This is not about political correctness. This is about good governance and good business. The international evidence supports this: diverse boards are better boards benefiting from fresh perspectives, opinions and new ideas which ultimately serve the company’s long-term interests.”

Yet, reporting on the world wide position, The World Economic Forum has produced the Corporate Gender Gap Report, which explicitly states that “women are still failing to break into senior management” in business.

The Daily FT some time ago ran a headline ‘No place for women in Lankan boardrooms’. The editorial the next day, on ‘Women: Undisputed equal partners of progress,’ highlighted the fact that the performance of Sri Lanka in women’s participation in politics was worst in the region.

India

The position in the executive suite in South Asia is a reflection on the general discrimination against females. Some vote hunters and gatherers complained that women were in the basement of politics and hailed India’s initiative on a Constitutional amendment for reservation of slots in Parliament for women. But if they watched how some Indian male politicians behaved in Parliament’s Rajya Sabha to block the amendment, live on TV, it would be a reality check on male attitudes!

Arun Jaitely, the then Leader of the Opposition in the Rajya Sabha, today India’s Minister of Finance, said that it was a historical occasion on two counts; firstly they were enacting the most progressive legislation ever, the Women’s Reservation Bill, and secondly, the behaviour in the House reached a new low! Unruly MPs were ejected by Marshals.

The law reserves a third of all seats in the Indian National Parliament and State Legislatures for women. Rajiv Gandhi when Prime Minister enacted legislation which reserves a third of Panchayat seats for women; this has significantly increased the role of women at that level of government. Congress Chairperson, now oppositionist, Sonia Gandhi was the moving force behind that intuitive, which was first proposed in 1996. It is still pending.

Even more depressing is how the male-dominated political parties have dealt with the draft of the statute brought to the Indian Parliament after the horrific gang rape of a woman student in a moving bus. One politician has gone on record that there is no such thing as ‘marital rape’! Another has said that ‘rape’ should be confined to women; for males who are abused, it should be merely an unnatural offence! These people are living in the dark ages.

When the bill was tabled in the Lok Sabha, the real attitude of the average male Member of Parliament to their women voters was laid bare. Chauvinistic stories, anecdotes and satire came into play in the debate. Sharad Yadav, Leader of the then pro-Government JD (U) from Mumbai, who at one time chaired the Indian Cricket Board and International Cricket Council, confessed: “Who amongst us has not followed girls?” – admitting to and trivialising the offence of ‘stalking,’ made a crime under the new law. He should be happy that the law does not apply ex post facto, to stalking committed before it was a criminal offence!

He went on to express the opinion that after this new law, The Criminal Law (Amendment) Act of 2013, is enacted, women might not get jobs: “Men would be scared to give jobs to women.” He cited as evidence the so-called misuse of the Anti Dowry Law in India, which Indian women fought hard to get enacted to protect young brides from dowry deaths, being burnt alive in most cases, due to the in-laws and husband supposedly not being paid the negotiated and agreed dowry. No wonder Indian women international cricketers complain that they are discriminated against, if this is the attitude of a one-time Chairman of the Indian Board of Control for Cricket and the ICC. Put this in the context of allegations of sexual favours being demanded for selection for the Sri Lanka Women’s Cricket National Team!

However, the few women Parliamentarians in the Indian Lok Sabha aggressively supported the new law, demanding a change in the mindset of Indian people, arresting false moral values and for the launch of a reformist campaign which would educate people on equal gender rights, respect and dignity of women. The law has been enacted, but a mindset change will take at least a generation.

Sri Lanka

In Sri Lanka, at the last count, only four of the top 20 listed companies on the CSE have female directors. I challenge any reader to show me a billboard anywhere in the island showing a daughter as a collaborator in the business.

The equivalent of the alternative gender, Perera & Sons, or Silva Brothers, is easy to find. But why is it always sons and not daughters, brothers and not sisters? In this country, where the female population outnumbers the male statistically, where it is said that over 60% of the accountancy students are females, where 63% of professionals are women, why this gender disparity in the fields of business and enterprise?

Our level of female emancipation and participation here, except in certain exceptional situations including representation at corporate board level, is extremely liberal, for South Asia. The teachings of the Gautama the Buddha set a fairly high standard on gender participation among the majority of the population. But in generality an affirmative and liberal attitude has prevailed on gender issues, which has been strengthened by non-fee-levying education accessible cutting across gender biases, and non-fee-levying health services being available to all, empowering women by permitting them to control their own fertility, and not to be dictated to on it, by men.

In the employment pyramid, at the bottom and mid levels, female participation and contribution is high; one has to only look at the teaching service, Government clerical, apparel, plantation and subsistence agriculture and foreign employment sectors.

Exorcising gender discrimination

We have to examine gender discrimination and exorcise it from the system. For example, is it justifiable that we consider and classify those involved in home-based child rearing, caring for elders, household assistants (a.k.a. domestic servants) and homemaking, a socially vital and key economic task that the majority of women are involved in, as unemployed?

The Daily FT some time ago referred to 48.4% of the female population over 15 years being economically inactive – homemakers, childminders, carers of the aged – economically inactive? It’s time that someone should take another look at this! Women involved in those tasks may not bring an economic return immediately, but they are nurturing the future generation or caring for the aged, releasing other people from the drudgery of housework to be active economically outside the home, and play a vital social and economic role.

If housewives are to focus less on this aspect and go out to work, or even engage in economic activity in the home, arrangements must be made for childcare facilities, home maker support and care for elders. Or in the alternative, women involved in that type of work should be given an economic reward and benefit.

Consider homemakers, child and aged carers as playing a vital role and recognise their economic contribution, quantify it and reward it – there are ways of doing this through fiscal policy, which will make the role of women more meaningful than all the sanctimonious pontification and platitudes being expressed on women’s rights.

Critical problem

Sri Lanka faces a critical problem in this regard since our current birth rate is only around 0.7%, well below replacement level, which is 2.1%; every woman has to have more than two children. Our population is in decline, and we have to do everything we can to get both the brawn and the brains of all our citizens to contribute to the economy.

We need the brains of educated women to strengthen our competitiveness in management, manufacture, trade and services. We have to include women in the pool of talent we have at our disposal for national development. The vital role mothers and women in the extended family play in the nurture of their children should not be underestimated.

Employment rules must be flexible so that women can leave full time employment for child bearing, child caring and nurturing and aged care purposes and rejoin the work force without detriment when the children are old enough to be placed in nursery school or when care could be provided to aged dependants. The law must recognise the responsibilities of men in home making, child care, nurture and care for the aged. Paternity leave is a concept which must enter our lexicon in the field of labour law.

Mallika Sarabhai

In India, Mallika Sarabhai, a dancer of international repute, who has stood in general elections, spoke thus on the Women’s Reservation Bill: “India made a promise to its women at independence, a promise of living with dignity, opportunity, self pride, fearlessness. India may have unleashed forces that could bring succour to her deprived, her marginalised, her unsung and unheard. Some men plundered our bodies and souls, and dishonoured us, made us afraid of further sanctions.

For women are too often the loot – our bodies, our minds, our thoughts, our wombs. But aren’t women greedy and corrupt as men? Yes some are, trapped alone in gutters, called male corridors of power, tutored by a patriarchal society that equates selfish self interest and greed as cleverness, but there is the very real possibility that the women will not play by the same rules, that they will in a group be able to let their instincts of cooperation, inclusiveness and caring, nurturing and problem solving prevail. The road is long. Women need to be chosen, trained, tutored, and equipped – not in corrupt ways but in governance, in delivery of benefits and empowerment, in transparency.” The infamous rape on the moving bus in Delhi proved her correct a thousand times over.

Equity requires bold steps

The example of the Nordic Vikings has been emulated by many countries. France’s lower house approved a bill that would compel corporates to increase the proportion of women on their boards to 40% by 2016. Spain has introduced a provision to hit that target by 2015. The Netherlands and Italy are on the same track.

However, a similar move by the European Commission was recently shot down. The usual platitudes about ‘quotas not working’! Try telling that to the scheduled caste and tribals in India who have benefited, been empowered and emboldened by reservation schemes in university admission and Government jobs in India. Look at what quotas have achieved to feminise board rooms in Britain. Equity can only be brought about by bold steps.

There is a serious financial inclusion issue here too. Consider the microfinance sector. In Sri Lanka and the world, 80% of microfinance borrowers are marginalised women. Yet Sri Lanka is one of the few developing countries which do not have in place a statutory prudential regulatory mechanism for microfinance.

Would this attitude of indifference and inaction by male-dominated regulatory and political institutions have prevailed or even been tolerated for a day if men were 80% of the people to whom vital financial inclusion services were being provided, to a hitherto unbanked sector of the population, by microfinance institutions? Consider this, on the eve of a presidential election, where women voters statistically outnumber men!

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Latest comments

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    The female of the species, including Homo Sapiens, has always been from the dawn of history relegated to childbirth and raising children.
    In the modern age, the female is thought to be a tender helpless being, to be always protected by the male – thus, “chivalry” was born.
    Female athletes can never equal males in any event.
    Only females can be raped, not males!!
    In the east, only the female has to be chaste before marriage.
    These thoughts permeate the thinking of modern males.
    In politics, statecraft and professions too, except in a few, females do not achieve as well as males – unless the ‘greatness’ is thrust upon them, like our world’s first woman prime minister who was a misfit and mismanaged completely.
    But, it is the right of women to rise to the same level as men, intellectually, and this is slowly happening in many countries and is naturally slow due to the gender differences, both physically and mentally.
    Nordic countries are exceptions, due to their lifestyles.

  • 0
    0

    Excellent article. Thank you Mr Charitha Ratwatte. I hope the common opposition campaign heeds your concluding sentence.

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