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The Need for More Women in Leadership Positions

By Edited Nov 13, 2013 0 0

The world has moved on, and there are more women managers than in our grandmothers' day. But there are still very few famous women in business relative to the opportunities that exist.

Today, women and education go hand in hand. So why, proportional to their number in the workplace, are there so few women as leaders?

Have you ever wondered why there are fewer famous women in business than men? Even though there are more women managers in offices than in the past, there are still very few CEOs. I interviewed Douglas Branson, author of No Seat at the Table: How Corporate Governance and Law Keep Women out of the Boardroom and The Last Male Bastion: Gender and the CEO Suite on this subject on my radio show, Goldstein on Gelt.


To find out more, please read the transcript of this interview below.


If you would like to watch a video of the interview, scroll further down the page.  



Douglas Goldstein:                What percentage of CEOs in the world are women?


Douglas Branson:                  It was 3% a year ago, but it’s fallen.  We had six resignations and only one replacement, so we’re down to 2%.  We probably lead the world, with 1% or less most concrete.  But in Germany and in Japan, it is not even 1 percent.  It’s pretty low everywhere you go.  It means that women have been promised equality or parity for 30 some years now.  They have been going to business schools, graduate schools, law, and other fields, but they only rise so far.


About half the middle managers in major companies are women now, but the percentage of senior managers is about 7% or 8%.  The glass ceiling can never be proved directly, but it probably exists and women continue to bump up against it.  There are a number of reasons for that, but I look at this from the social justice standpoint.  Other people are trying to make the business case that more women on boards and more women senior managers will lead to greater profitability, but the studies are mixed and you can’t make that case.  I primarily get it from the social justice standpoint, and I am the father of two daughters so I consider it very important.


Douglas Goldstein:                The angle that you’re looking at is from social justice, which we could term ‘fairness.’  It should be fair that that half the number of seats in the CEO offices should be women because women are about half the population.  Is that what ‘social justice’ means?


Douglas Branson:                  No.  I don’t mean exact parity, but I want a removal of artificial obstacles so that women may wind up with 20% or 70%.  I just want the removal of obstacles in the pathway that would lead women to senior management positions and boards of directors. 


Douglas Goldstein:                Is there perhaps an argument to the opposite, which is that it is just more profitable to have women not represented as strongly?


Douglas Branson:                  I don’t think that people make that study because it would be politically incorrect.  I don’t think that they would have any chance of getting that kind of study approved.  I have never seen one that makes the opposite case.  I’ve just seen the mega studies, the study of studies, which show there are no convincing studies out there that say board composition, whether it would be of women, minorities or other minorities, African-Americans, that diversity on a board of directors or management wouldn’t lead to greater profitability.  I think it misconceives the purpose, at least of the board of directors, which is not to increase profitability, but to act like fog lights within a car - to sense the possibility of disaster, to replace underperforming or mis-performing managers.  The board of directors will evaluate and if necessary replace senior managers only third or fourth, if the priority to them is to contribute to profitability, and that would be in terms of long-run strategic planning.  It’s pretty hard to find any correlation or prove up any correlation between that and profitability. 


Douglas Goldstein:                The board of directors is in theory supposed to represent the good of the shareholders.  The key benefit to the shareholders would be the increasing value of the stock, and therefore wouldn’t the interest of the board of directors, whether they do it well or not, be to maximize profits?


Douglas Branson:                  It’s been a yin-yang.  In the 70s and 80s, statutes were put on the board in affirmative duty to manage the business and affairs of the corporation.  In 1980, that was changed to passive voice and the business affairs should be managed under the direction and supervision of the board.  A number of academicians and management writers, like Yen Zhang, said that the board’s highest and best use is to monitor and if necessary replace the senior managers.  Only third or fourth priority is profitability, but then after Enron, WorldCom, and some of the other imbroglios and Parmalat in Italy, people began putting boards somewhat back into that management role.  Who’s to say where we are now?


Like anything else, the view of what a board of director is and should be doing changes every decade or two and it works from one thing into another.  I think that there are more people urging that boards should take an active management role than they were 15 years ago, but I still think the board’s highest and best use is to monitor the managers.  That does indirectly play a role in profitability.

Douglas Goldstein:                In the western world, women these days receive the same educational opportunities as men.  They have access to family planning and they are certainly more emotionally capable of being assertive than in the past.  Based on all of these events, why would you say that there are still so far fewer female CEOs?


Douglas Branson:                  One thing is that in western societies, women speak differently and act differently than men do.  Men as the dominant force in our societies often interpret that as women being more emotional, women being less analytical, and women being intuitive.  But linguists like Robin Lakoff at California Berkeley and Deborah Tannen at Georgetown have shown that that’s false.  There is no correlation between the way a woman may speak and act.  She may use fewer imperatives.  She may use conditional verbs.  She may use edges at the end of sentences like, “Don’t you think?” or, “Doesn’t that seem right?” whereas a man will say, “We should manufacture X or Y.”  The baggage associated with that really doesn’t exist.  That’s one reason that women have an advance that is not a very good reason.


Another is childbearing.  If the woman limits herself to one child and takes a minimum  maternity leave, in the United States she will make 99% of what a comparable male makes in their 40s.  If however she has two or more children, takes time off for a little extra time for childrearing, say one of her children starts school, she will make only 60% of what a male makes.  Paradoxically, as women go toward the top, they have more and more children.


I did a study with Joann Lublin of The Wall Street Journal last year.  Out of 21 women chief executive officers, 19 have children and the total number of children is 47.  Numbers of these women have three children, and they testify that as you reach the top in a business organization, you need your family more than your family needs you because you need somebody who gives you unconditional love and also gives you unconditional backtalk and guff.  Some of these women talk about Anne Mulcahy of Xerox who has a son who plays baseball and another one who runs track.  She made it a point never to miss one of their athletic events.  Women opt out because they see this future where if they take any more time, they will make a lot less money.  As they get in the senior ranks of management, having a family is more important because it enables them to keep their sense of perspective.


Douglas Goldstein:                There’s no unusual curve? The curve is that with one child, you can still make money comparable to men.  You get a little more than your salary goes down but then if you want to get to the top ranks, you have to have a bunch of kids.  Is that the statistics?


Douglas Branson:                  It helps.  One of the real reasons is sociology.  As women go above the middle management rank, they may retreat into stereotypes, they may become the mother figure, they may become the mascot, they may become the clown or they may become what’s called ‘the ice queen.’  Their true potential isn’t as readily apparently as it is with men.  When two women are present in a work group or in a rank, you think it would be better?  It’s actually worse because that’s called a skewed group and the dominance in a work center or particular rank will close ranks and engage in what’s called ‘boundary heightening.’ 


There is a woman named Rosabeth Moss Kanther who is a sociologist and teaches at the Harvard Business School, and she wrote a book in 1984 called Men and Women of the Corporation.  It sounds infantile, but a lot of the feminist writers say three or more is the magic number.  I think that’s true but not at the board of directors level.  Ten years earlier, when women are entering senior management, three is the magic number because if we have those groups in various places 10 years later, the pool from which women directors and senior managers could be chosen will be much larger.  It’s a pool problem.


Women in the workplace


I just got a manuscript from a woman at Duke who wrote about three is the magic number at the board of director’s level, and she misconceived the argument for a number greater than two, and that’s 15 years earlier below a rank of senior management.  That’s for other women in the support group as quasi-mentors and the like. 


Douglas Goldstein:                Could you tell me how people could follow your work or learn more about the research that you’ve done?


Douglas Branson:                  Buy the book, they are on Amazon.  I think there’s a lot of research going on.  It’s a very hot topic with the quarter laws in Norway, now in France and in Spain.  With the European economic crazies right now, it’s moved a little bit toward the backburner, but quarter laws are under consideration for Germany, for Italy.  I don’t think you’ll ever see quarter laws in Israel probably, in the United States or in the United Kingdom, but there are other things too.  The Australia Institute of Corporate Directors started a very interesting mentoring program where the chairman of the board of various companies promised to mentor a woman and put her on a board of a publicly held company.  The number has increased from 8 to 11% in less than a year of women on the boards of publicly held companies in Australia.  There’s now a lot of writing or research but there are lot of actual feet on the ground movements going on in various places.  It’s a very hot topic in Europe and the 27 member nations of the European Union.  I think it’s being discussed in almost all of the capitals. 




Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.



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