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Posts Tagged ‘empathy’

Women in leadership positions has been a frequent topic lately.

On October 25th, the European Parliament rejected the nomination of a male banker to the board of directors of the European Central Bank because he’s a man.  The ECB’s governing body has 23 members, all of whom are men.  In addition, a proposal for EU legislation establishing a 40% quota for women on company boards throughout Europe also failed to pass.

And then there’s Romney’s remark on October 16, “And – and so we – we took a concerted effort to go out and find women who had backgrounds that could be qualified to become members of our cabinet. I went to a number of women’s groups and said, ‘Can you help us find folks,’ and they brought us whole binders full of women.”

As I have shared in a prior blog post, Where are the women in leadership positions?, the presence of women in leadership positions is lacking in the United States.  This is also true for boardrooms throughout the world.

We continue to experience the dichotomy of women in leadership positions.  One the one hand, a report by the European Commission claims that it would take 40 years to achieve a 40% representation rate of women on European corporate boards at the current rate that companies are including women.  On the other hand, recent articles and studies suggest that emotion and empathy are an integral part of leadership and two authors in articles issued on October 30 indicate that women bring a more complete set of skills to leadership, the linear and non-linear.  This blog post summarizes some of the EU news and the two aforementioned articles.

The nations with the highest rates of membership of women on corporate boards are (1):

  • Norway *           40.1%
  • Sweden              27.3%
  • Finland              24.5%
  • USA                    16.1%
  • South Africa     15.8%
  • Israel                  15.0%
  • UK                      15.0%

Examining women as board chairs worldwide provides some very different results (see same source).

*Norway enacted legislation in 2003 to ensure that 40 percent of directors in public companies are women.

The European Commission report, Women in economic decision-making in the EU: Progress report issued in 2012 provides an accounting of the progress of women in corporate leadership.  In 2010, the European Commission adopted a Strategy for Equality between Women and Men (2010-2015).  This was followed in March 2011 by a call for action, “Women on the Board Pledge for Europe,” for publicly listed European companies to voluntarily commit to increase the number of women on their boards.  The European Parliament supported this call by adopting a resolution in July 2011 “calling inter alia for legislation at the European level if companies do not make sufficient progress through self-regulation.”  During 2011, France, the Netherlands, Italy, and Belgium enacted legislation to improve gender balance on company boards.

The report indicates that progress has been slow in the EU, with the representation of women in the largest companies in Europe having increased from 11.8% in 2010 to 13.7% in January 2012.  However, in the same time period the number of female chairpersons declined from 3.4% to 3.2%.  Further only 24 companies have signed onto the call for action, “Women on the Board Pledge for Europe.”  The report concludes that at the present rate, it would take 40 years to achieve the goal of 40% female representation on corporate boards.

A global study of the representation of women on corporate boards as well as national quotas and initiatives of selected nations can be found in Women in the boardroom: A global perspective published by the Deloitte Center for Corporate Governance in November 2011 (2nd edition).

Steven M. Davidoff writes in the New York Times on September 11, 2012, Seeking Critical Mass of Gender Equality in the Boardroom

 But there is also an economic argument that is sometimes made to support the role of women on boards. The claim is that boards with women become better decision makers, increase companies’ profits and lead them to be more humanely run.

These assertions are based on research that in general makes the unsurprising conclusion that men and women are different, … studies have found that women in the boardroom have different values, make decisions differently and engender a more cooperative atmosphere.

While these studies are promising for advocates of women on boards, the bottom line is that the effect of women directors has yet to be established. Whether they add value just by their presence is undetermined because the number of women on boards remains low. The true test will be when there are a number of companies with boards comprising 50 percent or more women that can be compared against those with less. We’re not there yet.

In addition to the recent activity in Europe, two articles on women and leadership were issued on October 30, 2012.

Tony Schwartz acknowledges in What Women Know About Leadership that Men Don’t on the HBR Network Blog that learning to take better care of the people he leads has been his single greatest challenge.  He asserts that, “An effective modern leader requires a blend of intellectual qualities — the ability to think analytically, strategically and creatively — and emotional ones, including self-awareness, empathy, and humility. In short, great leadership begins with being a whole human being.”

He questions why women are vastly underrepresented at the highest levels of large companies.

[In] a study of 7300 leaders who got rated by their peers, supervisors and direct reports. Women scored higher in 12 of 16 key skills — not just developing others, building relationships, collaborating, and practicing self development, but also taking initiative, driving for results and solving problems and analyzing issues.

[In] a study of 2250 adults conducted by the PEW center, women were rated higher on a range of leadership quality including honesty, intelligence, diligence, compassion and creativity.

Saad Al Barrak claims in the Perils of Ignoring the Softer Side of Management, published in FastCompany.com on October 30, 2012 that “An overemphasis on the ‘hard’ side of management, a carryover from the industrial age, can at best achieve a linear increase in performance. But a focus on the soft, non-linear side can lead to exponential growth.”

Al Barrak’s article dovetails well with a recent article, Secrets of the Flux Leader, which I addressed in a blog post, The Higgs Boson of Leadership, on October 26.  Barrak writes,

In managing human beings, you manage emotions and passions. Indeed, optimize their passionate state in order that they deliver their best. That is totally non-linear: The mistake that 90 percent of managers and business leaders make is that they try and linearize the behavioral side by proceduralizing it.

Reality, especially in today’s world, is dynamic: Even if the structure suits the time it is created, by the time it has been put into practice that reality has already shifted.

If we agree that corporate boards should represent their constituency, that is include women as well as minorities, what is the role of public policy in achieving this goal?

(1) Women on Boards, Catalyst, August 2012

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