Question

Gender Bias in the Executive Suite Worldwide

The Grant Thornton International Business Report (IBR) has described itself as "a quarterly survey of business leaders from across the globe … surveying 11,500 businesses in 40 economies across the globe on an annual basis." 1 According to the 2011 IBR, the Asia Pacific region had a higher percentage (27 percent) of female chief executive officers (CEOs) than Europe and North America. Japan is the only Asia Pacific region exception.

The report further stated that Thailand had the world’s highest percentage of female CEOs at 30 percent. Japan and the United Arab Emirates had the lowest, tied at 8 percent.

According to the 2011 IBR, Thailand led other nations with women in 45 percent of all corporate senior management positions in Thai businesses. Georgia (formerly part of the Soviet Union) was second at 40 percent. Russia was third at 36 percent. However, the 2011 Grant Thornton report also stated that the overall proportion of women in senior management positions worldwide had shrunk back to 2004 levels.

The Glass Ceiling Defined

The term glass ceiling was coined by Wall Street Journal writers Carol Hymowitz and Timothy D. Schellhardt in their March 24, 1986, feature article. The term referred to barriers facing women attempting to attain the highest ranks and other senior positions in corporations, government, education, and nonprofit organizations.

In a 2004 report "The Glass Ceiling: Domestic and International Perspectives," by the Society for Human Resources Management (SHRM), HR content expert Nancy Lockwood states: "A major sign of the effect of the glass ceiling is gender-biased compensation. Countless studies and anecdotal reports have shown huge discrepancies in salary in favor of men, even for similar positions in similar organizations." Lockwood added, "Another indicator of the glass ceiling is when women’s advancement is hampered by well-ingrained corporate cultures."

SHRM is the world’s largest association devoted to human resource management, representing more than 120,000 members in more than 100 countries. Its 2004 report stated that international implications of the glass ceiling are "often compounded by cultural values and traditional gender roles." According to the report, the top three barriers for women to gaining global business experience are:

Getting selected—the biggest hurdle to enter the global business arena

Being perceived as less internationally mobile than men due to work and personal responsibilities

Lack of mentors and networks on international assignments

In the report, Lockwood also listed international laws against discrimination in employment as enforced by these organizations: The European Union’s Equal Pay Directive; International Labor Organization (ILO) Equal Remuneration Convention No. 100; the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises; and the United Nations’ Global Compact.

Existence of a Glass Ceiling Questioned

Following the late 1980s definition of glass ceiling, some challenged the term and the circumstances it describes. In a 2010 big think interview with John Cookson, for example, psychology professor Alice H. Eagly of Northwestern University in Chicago, Illinois, stated that the glass ceiling "is not a good metaphor" and is more "a metaphor for prejudice."

In a 2007 Harvard Business Review article, Eagly and Linda L. Carli state that the term glass ceiling has outlived its usefulness. Their article, "Women and the Labyrinth of Leadership," states that many obstacles in addition to sexism face women in the business world. Eagly and Carli envisioned these obstacles as parts of what they called "the labyrinth of leadership." In their article, common obstacles within the labyrinth are identified as follows:

Vestiges of prejudice (sexism): Eagly and Carli admit that sexism is still as a key obstacle in the upper levels of the business world. They further state that the "scarcity of female corporate officers is the sum of discrimination that has operated at all ranks, not evidence of a particular obstacle to advancement as women approach the top. The problem, in other words, is not a glass ceiling."

Resistance to women’s leadership: According to Eagly and Carli, female managers are often looked upon as "more deceitful, pushy, selfish, and abrasive than male managers." 2

Issues of leadership style: Regarding leadership style, Eagly and Carli state that female corporate executives often have inner conflicts about showing feminine and masculine traits in the business world. They further state, "Women leaders worry a lot about these things, complicating the labyrinth that they negotiate." 3

Demands of family life: Eagly and Carli state, "For many women, the most fateful turns in the labyrinth are the ones taken under pressure of family responsibilities. Women continue to be the ones who interrupt their careers, take more days off, and work part-time." 4 Eagly and Carli add, "Decision makers often assume that mothers have domestic responsibilities that make it inappropriate to promote them to demanding positions." 5

Underinvestment in social capital: According to Eagly and Carli, a chief obstacle is "social capital" at work. They state, "the most destructive result of the work/family balancing act so many women must perform is that it leaves very little time for socializing with colleagues and building professional networks. The social capital that accrues from such ‘nonessential’ parts of work turns out to be quite essential indeed." 6

As a sidenote, the July 21, 2005, Economist article "Women in Business: Helping Women Get to the Top" adds the challenge of re-entry after family leave as a chief obstacle. It states that companies should offer "retraining to help bring women at least back to the level they were at when they left." It further suggests that "women who want to stay on the career ladder are themselves under some obligation to keep in touch with their previous employer and to keep up-to-date with the skills they need to make a smooth re-entry."

Women in the Boardroom Worldwide

According to the December 21, 2009, Harvard Business Review (HBR) blog, companies in the Philippines had the highest percentage of female board members at 47 percent. Russia was second at 42 percent. Malaysia followed at 38 percent.

The 2011 report from the Deloitte Global Center for Corporate Governance titled "Women in the Boardroom: Global Perspective," examines legislative efforts across 12 countries, comparing the percentage of women on boards around the world. Dan Konigsburg, leader of the Deloitte Global Center, states in the report, "From a corporate governance perspective, including more individuals with different backgrounds on boards of directors could improve boards’ performance." 7 The 2011 report’s chief focus was "the specific question of quotas for women on boards." 8

The Deloitte report includes reactions from respected global business executives to mandated quotas for women on corporate boards, for example, some of which are given below:

Intel chairman of the board Jane Shaw states: "Mandates and quotas may drive compliance, but they will not drive genuine commitment. The more we focus on specific areas of expertise versus relationships of comfort, the more likely we are to broaden the available pool and include women." 9

Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (DSW) is Germany’s oldest and largest association for private investors. In the 2011 Deloitte report, DSW’s managing director Jella Benner-Heinacker is quoted as supporting boardroom gender diversity quotas. Benner-Heinacker states: "The introduction of quotas for female board representation could bring us a fast and very large step forward." 10

In the report, Irene Lee, non-executive director of Cathay Pacific Airways Limited, offers an approach that is wider than diversity quotas in the boardroom. She states, "Companies need to have a corporate culture which encourages a sustained pool of diverse talent from the ground level … a comprehensive strategy for talent development and retention … together with a gender balance target range." 11

Gender Quotas in the Boardroom

"The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation" is a May 2011 University of Michigan, Ross Business School study by Amy Dittmar and Kenneth Ahern. The study focuses on the 2003 Norwegian Public Limited Liability Companies Act, described as "a first-of-its-kind law requiring all public-limited firms to have at least 40 percent representation of women on their boards of directors by July of 2005." 12

Norway’s law specifies as follows:

For a board of directors with more than nine members, women should make up at least 40 percent.

Boards with 6-8 members should have at least three female members.

Boards with 4-5 members should have at least two female members.

According to Dittmar and Ahern, Spain followed with its own boardroom quota law in 2007; followed by France in 2011. Also in 2011, the EU Parliament passed a resolution stipulating that at least 40 percent of boardroom seats be reserved for women. The EU resolution, however, only conveys a growing need and was not intended to be a mandated law for member countries.

Norway’s Mandated Gender Diversity Quota

Like the EU resolution, Norway’s Public Limited Liability Companies Act had serious penalties for companies failing to comply, the most serious penalty being legal dissolution. Mandated gender diversity quotas in Norwegian boardrooms have garnered mixed opinions, some showing mixed results.

In Norway, gullskjortene or "golden skirts" became a slang term for new female board members mandated by board gender diversity quotas. Many of these board members wound up serving on multiple corporate boards. Some have called the law "state-sponsored feminism," whereas proponents called Norway an "exporter of women’s rights." 13

In the February 16, 2011, Spiegel Online International article "Have Gender Quotas Really Helped Norwegian Women," critics and supporters offered opinions on Norway’s mandated gender diversity quota law. In this article, president of the Confederation of Norwegian Enterprises (NHO) Kristin Skogen Lund, states, "Many women simply lack the necessary courage" to enter the boardroom and executive suite because of "responsibilities in the household and raising children." She adds, "Women fall behind in their careers and do not manage to make the big step up the ladder." Skogen Lund further states that "mothers and fathers should each take on one-third of the parental leave period." When she made these statements, Lund herself was raising two sets of twins, and her husband took a few months of paternity leave to help care for the children.

In her January 27, 2010, New York Times article "Getting Women into the Boardroom, by Law," Nicola Clark writes that "80 percent of Norwegian women work outside the home, and half the current government’s ministers are female." Clark adds that, when the law was first proposed by Norway’s trade and industry minister Ansgard Gabrielsen in 2002, "Norwegian women held less than 7 percent of private-sector board seats; just under 5 percent of chief executives were women." Under the law, state-owned companies had "until 2006 to comply and publicly listed companies until 2008."

The Dittmar and Ahern study presents a contrary view on board quotas. They found that as the boards in Norway grew younger and more inexperienced, performance declined. This pattern occurred despite average annual gains of more than 14 percent in Oslo’s benchmark stock index during the 2001-2007 study period. They add that "in a panel of 248 publicly listed Norwegian firms, [they] found a large negative impact of the mandated board changes on firm values." 14 They added, "From 2003 to 2009, the percentage of female board members in private firms increased by only two to five percentage points, depending on the size of the firm, compared to increases of 23 to 34 percentage points for public limited firms." 15

Marit Hoel, director of Oslo’s Center for Corporate Diversity, is quoted in Clark’s article as saying, "if you look at where real economic power sharing is needed, it is at the executive-committee level. That is what we were trying to speed up—but unfortunately that hasn’t happened yet."

However, in Clark’s January 2010 New York Times article, Ruilf Rustad, who has been chairman of at least 20 listed Norwegian companies, is quoted as saying, "When you suddenly replace 30 percent to 40 percent of your board with inexperienced people, it is easier for those new members to be manipulated—that’s just common sense."

Also according to the 2010 New York Times article, a "2007 McKinsey study of the largest European companies found that those with at least three women on their executive committees significantly outperformed their sector in terms of average return on equity by about 10 percent; operating profit was nearly twice as high."

Norway has had a long history as a progressive advocate of women’s rights. In 1913, Norway introduced full women’s suffrage. Norway’s government has long paid women taking pregnancy leave 80 percent of their salary for an entire year. Moreover, as a basic rule, Norwegian companies have no meetings after 4 p.m., out of respect for family responsibilities.

Women CEOs Worldwide

The 2011 Grant Thornton IBR found that the growing number of female CEOs in Thailand outpaced 39 other countries and regions in their survey at 30 percent. Of the Asia Pacific region, China had the second highest average at 19 percent, followed by Taiwan at 18 percent and Vietnam at 16 percent. According to the IBR, the Asia Pacific region overall, excluding Japan, held the highest regional percentage of female CEOs at 27 percent. The overall average for the countries and regions in the 2011 Grant Thornton survey was 8 percent.

In the December 21, 2009, Harvard Business Review article "Women CEOs: Why So Few?" Herminia Ibarra and Morten T. Hansen state that female CEOs would "face additional market and media scrutiny." For example, a study by Erika Hayes James found that "stock in a company drops after the announcement of a female CEO, but not after that of a male CEO, and that this effect was stronger for outsider CEO women."

Female CEOs in Thailand

In a July 5, 2011, article by Tania Branigan in The Guardian, Bangkok-based political analyst Chris Baker is quoted as observing that the dynastic factor in the Thai business world "is not only very powerful in terms of coming to power but, by and large, it seems, in staying there."

Many of Thailand’s female CEOs came from established business dynasties, a prime example being Yingluck Shinawatra, Thailand’s first female prime minister. Most of her prior executive career was spent as CEO of AIS, then the country’s largest mobile phone operator.

On October 19, 2006, Tarisa Watanagase became the first female governor of the Bank of Thailand, the country’s central bank. She illustrates how Thai female CEOs advance without the necessary family dynasty business connections.

Prime Minister Yingluck Shinawatra

On July 3, 2011, Yingluck Shinawatra became the first female prime minister of Thailand. According to a profile by Thomas White Global Investing, "she was born into the Shinawatra-clan, which built its business empire first by trading in silk and then later by dominating the [Thai] world of finance, property-development and infrastructure." According to the report, Yingluck’s father "was a famous politician and served as a Member of Parliament."

It also helped that she was the younger sister of Thaksin Shinawatra, the controversial yet popular former prime minister and founder of the powerful ShinCorp telecommunications and real estate dynasty.

Seventeen years older than his sister, Thaksin has been more like a second father to Yingluck. He came from humble beginnings as a police officer and became the head of a powerful Thai business dynasty. A June 24, 2011, BBC News profile capsule described Thaksin as "the first prime minister in Thailand’s history to lead an elected government through a full term in office. He was enormously popular, especially among the rural poor, but also proved a divisive figure and was deeply unpopular among many of Bangkok’s rich elite."

He was elected prime minister in 2001 and 2005 but was ousted in a military coup in 2006 amid accusations of corruption. According to the 2011 BBC News profile, despite living in "self-imposed exile" mostly in Dubai and London, "Thaksin is still a dominant and divisive presence in Thai politics."

Political opponents have accused Yingluck of being her older brother’s puppet. In her July 5, 2011, Guardian profile of Yingluck Shinawatra, Tania Branigan offered an example, stating that Puea Thai, the party Yingluck fronted in the election, "used the slogan ‘Thaksin thinks—Puea Thai does’." Branigan adds that Yingluck’s brother has at times described her "as his ‘clone’—later caveating that he meant she shares his way of thinking." Moreover, on the campaign trail, Yingluck has repeatedly asked, "If you love my brother, will you give his younger sister a chance?"

However, in her Guardian profile, Branigan also quoted Kevin Hewison, an expert on Thailand at the University of North Carolina. He stated: "at the start of the campaign, many saw Yingluck as little more than a puppet and questioned her nomination. … Actually it turned out to be a brilliant choice. She electrified the campaign."

According to an August 5, 2011, New York Times article by Thomas Fuller, Yingluck’s political career could be described as meteoric, spanning "about 80 days." Fuller also notes that before her comparatively brief political career, she had extensive executive level experience in the Thai business world. He further states that much of her career was "spent inside the family business, most notably as the chief executive of Thailand’s largest mobile phone operator," Advanced Info Service (AIS). This company was founded by her brother Thaksin.

During her reign as head of AIS, Yingluck told Thailand’s Nation News Network that under her leadership, "AIS has racked up an impressive list of accomplishments. One is the unexpectedly sharp growth in new customers—two million in the first half of this year alone out of a full-year target of three million. AIS still leads the cellular industry with 12 million users—60 percent of the market." She served as AIS CEO from 2002 to 2006.

According to a May 16, 2011, Bloomberg.com article, Yingluck stepped down as CEO in 2006 when Thaksin sold their family stake in ShinCorp, the holding company of which AIS was a part. This transaction was particularly controversial because the family stake was sold to a Singapore state-owned company, Temasek Holdings. Charges of conflict of interest and corruption led to Thaksin’s military-led ouster.

The Bloomberg article by Daniel Ten Kate further states that, upon stepping down from AIS, Yingluck became president of "Bangkok-based property developer SC Asset Corp., controlled by Thaksin’s children." Ten Kate cites positive results from her business management experience: "In Yingluck’s time running the company, SC Asset shares have risen 101 percent, compared with a 45 percent increase in Thailand’s benchmark SET Index."

As SC Asset president, Yingluck was further quoted as saying, "Many people think that my status as president of the company did not come from my own abilities. I use that. It inspires me to work even harder to produce results that everyone can accept."

Tarisa Watanagase, Bank of Thailand Governor

On October 19, 2006, Tarisa Watanagase became the first female governor of the Bank of Thailand (BOT), the country’s central bank. Unlike Yingluck Shinawatra, Watanagase did not come from a Thai business dynasty.

As of February 2012, a list of her job titles and educational background could be found on BOT’s website. Her education includes an MA degree in economics from Keio University in Tokyo; a PhD in economics from Washington University in St. Louis, Missouri; and an advanced management certificate from Harvard University, in Boston, Massachusetts.

According to BOT’s website, Watanagase started her career as an economist at the Bank of Thailand in 1975. After that, she worked her way up the corporate ladder, obtaining experience in every key department of the bank, including monetary policy, money market, supervision, and payment systems. In 1987, she became BOT’s assistant director in the Department of Economic Research. In the 1988–1991 period, she served as an economic advisor in the Central Banking Department of the International Monetary Fund (IMF) in Washington, D.C. From 1991 to 1993, she served BOT as deputy director of the Department of Bank Supervision and Examination. From 1998 to 2002, she served as the bank’s assistant governor of a variety of operational groups within BOT’s organization chart. From 2002 to 2006, she was deputy governor. From 2006 to 2010, she served as governor.

In a profile of Governor Tarisa Watanagase, the Thai Embassy in Japan’s website lists "the modernization of the country’s payment system," introducing electronic payment in the early 1990s, as one of her key contributions during her long career at the Bank of Thailand. Her reformer role after Thailand’s financial crisis of 1997-1998 was also mentioned as a major career achievement.

According to a 1999 Columbia University white paper by Narisa Laplamwanit, a financial crisis occurred after the Thai government decided to accommodate a policy of financial market deregulation measures, in particular tying its currency’s exchange rate to the U.S. dollar and other world currencies. As a result, deregulation made the Thai baht an attractive investment for a heavy influx of foreign investors who overinvested particularly in Thailand’s semiconductor and real estate development industries. As a result, wild speculation created a market bubble that burst along with the foreign debt associated with Thai real estate overdevelopment.

According to the Thai Embassy in Japan’s profile, one month after the 1997 crisis, "Dr. Tarisa was made head of the [BOT] Financial System Policy Department and was responsible for, and instrumental in, the formulation and implementation of the financial crisis resolution and financial sector and supervisory reforms." In addition, "after normalcy was restored, she oversaw the establishment and implementation of the first Financial Sector Master Plan" leading to the consolidation of the country’s banking system. It was this achievement that led to her appointment as an external assessor of the world banking system under the IMF and the World Bank’s Financial Sector Assessment Program.

Global Executive Diversity Solutions

On its website, the United Nations (UN) Global Compact describes itself as "the world’s largest corporate citizen initiative with more than 8,000 business participants and other stakeholders involved in more than 135 countries." It further describes itself as being "committed to aligning its operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption."

In March 2010, the UN Global Compact Office and UN Women, "the United Nations entity for Gender Equality and the Empowerment of Women", cosponsored the initiative "The Women’s Empowerment Principles—Equality Means Business." The initiative can be seen as a booklet at the UN Global Compact’s website. 16 The seven women’s empowerment principles offer gender diversity standards at the executive and other levels in global business. Standards include the following tasks:

Affirm high-level support and direct top-level policies for gender equality and human rights…Ensure that all policies are gender-sensitive–identifying factors that impact women and men differently–and that corporate culture advances equality and inclusion. 17

Pay equal remuneration, including benefits, for work of equal value and strive to pay a living wage to all women and men…Assure sufficient participation of women—30% or greater—in decision-making and governance at all levels and across all business areas. 18

Respect women and men workers’ rights to time off for medical care and counseling for themselves and their dependents. 19

Invest in workplace policies and programs that open avenues for advancement of women at all levels and across all business areas, and encourage women to enter nontraditional job fields. 20

Implement enterprise development, supply chain, and marketing practices that empower women. 21

Leverage influence, alone or in partnership, to advocate for gender equality and collaborate with business partners, suppliers and community leaders to promote inclusion. 22

Make public the company policies and implementation plan for promoting gender equality…establish benchmarks that quantify inclusion of women at all levels. 23

Questions

Explain the difference between the terms glass ceiling and labyrinth of leadership.

Discuss whether or not the term glass ceiling still applies to current global business practices.

Do you agree that current gender diversity issues in the executive suite stem from a labyrinth of causes that go beyond gender bias? Explain your reasoning.

Answer 1

The term glass ceiling is used to characterize the hidden and unseen obstacles that keeps a given demographic characteristically applied to minorities from growing beyond a certain level in a hierarchy. Women often find it very difficult to break the glass ceiling because they lie at the intersection of marginalized groups.

Furthermore these obstacles avert large number of women from acquiring and safeguarding the most commanding, prominent and highest paid positions in the workforce and thus it eventually acts as a drawback and provides inconvenience to the prospective contenders in their career expansion, growth and development.

It’s been firmly believed that labyrinths commences with a woman's profession by creating barriers and challenges in every path of their career growth prospects. Thus it comprises of sex discrimination, women's household responsibilities and occasionally women's own failure to believe in themselves.

Thus it’s very crucial and significant that further enhancement of gender equality in the workplace necessitates for a transformation that indeed must happen at all levels of the organization for instance the overall business customs and traditions and thought and perception process of the top level administrators in the organization.

The conventional feminist group Independent Women's Forum enumerates that in 1975 12% of corporate boards had eventually only one or more women members and in 1998 around 75% of corporate boards continued to have only one or more women members. Furthermore the Glass Ceiling Commission in 1995 envisaged at fortune 500 organizations and found that only 5% of the senior administration positions were held by women.

Thus the number of women in senior administrative positions still lags significantly behind the number of men. However a 2008 study report enumerated that 95% of US work force considers that women have made significant advancement at their workplace over the last 10 years but 85% still firmly believe that the glass ceiling has not yet totally broken even if it has been cracked.

Furthermore it’s very significant and crucial that if we want to develop and grow successful leadership qualities and dynamic leaders in this modern-day multifaceted and diverse business world we indeed need to facilitate gender diversity not just in the workforce but also in the leadership field and identify and acknowledge the disparity of leadership practices adopted at various managerial levels of the organization and enumerate suggestive administrative development programmes that in fact can facilitate to play a very crucial role towards encouraging and supporting the diversity of leadership.

Thus learning to perceive good leadership qualities by being a reflective observer and facilitator can indeed facilitate leaders to become more efficient and successful individually and help to formulate a job atmosphere that indeed can facilitate to identify and recognize individuals for their involvedness and multifaceted roles furthermore reflective practices indeed can be used in leadership development programmes by making use of 360 degree feedback practices.