What’s holding them back?

The statistics supporting the business case for having women on company boards  are compelling:

For companies in the top 25% (of highest women’s representation on the board) the return on equity was 53% higher; return on sales 42% higher; and return on invested capital is 66% higher than companies in the bottom quartile.

Of course statistics tell only part of the story – it’s possible that these companies performed better in spite of the women on the board rather than because of them.

It’s also possible that having women on a board is a sign of the intelligence and foresightedness which results in a well run and high performing company.

But regardless of the story behind those stats it does seem strange that women make up 46% of the New Zealand workforce but hold only 8.65% of directorships on the NZX top 100. Just 45 women hold 54  of the 624 board positions available and 60 of the top 100 boards have n0 female directors.

That’s been recognised by the Ministry of Women’s Affairs, The Institute of Directors and Business NZ who launched a joint initiative last night to promote the economic benefits of having more women on boards.

A lot of women are actively involved in private rural businesses. Many farms are husband and wife partnerships, so are a lot of the small businesses which support farming and Rural Women’s Enterprising Rural Woman Award highlighted some of the successful rural businesses run by women.

There are plenty of urban business women too so it’s not lack of skills and experience which is holding them back.

The April edition of Next magazine opened a story on the issue with this:

The chairman of a large Kiwi agricultural company is asked why there aren’t any women on his corporate board.

“There’s no place for sheilas in this conservative, provincial boardroom, apart from making the tea,” is his gobsmacking response.

I’d hope that attitudes have changed for the better since this comment was made seven years ago but that still hasn’t translated into an increase in female directors.

What’s holding them back?

Are women choosing not to put themselves forward or  are they not being accepted when they do because, regardless of qualifications and experience, having a y chromosome makes some candidates for directorships and management more equal than others?

P.S.

The Hand Mirror posted on the MWF/ID/BNZ joint initiative when it was first announced.

6 Responses to What’s holding them back?

  1. Paul Walker says:

    “Of course statistics tell only part of the story – it’s possible that these companies performed better in spite of the women on the board rather than because of them.”

    It could be the reserve, women only accept places on the boards of companies will are performing well already, in the hope that it will make them look better.

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  2. pmofnz says:

    Maybe those with the Y chromosome know their place in the scheme of things. I’ll have another cuppa, ta.

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  3. PaulL says:

    Or, still another option. Perhaps there are a shortage of suitable female candidates, and therefore only the most attractive companies can manage to bring them onto their board.

    In my experience a large part of the difficulty with increasing the percentage of women at the higher levels of the workforce is that they simply don’t want to do it. Not in a negative sense “oh, look at her she doesn’t have the will”, but in the positive sense that women tend to have other options.

    Life at the peak of any organisation or career is pretty tough. Many would say that the tradeoffs aren’t worth it. For men, there is a a societal pressure to continue to climb that ladder, to support their family, to keep up with their peers, and so on and so forth. Despite the fact that this means they don’t see their families much, travel lots, and the stress is bad for their health.

    For women, conversely, it is generally accepted in society that they don’t need to do this. Some do it anyway – they love it or other pressures mean they feel the need to do it. But for many women they can simply decide not to – to have a lower stress existence. And nobody gives it a second thought.

    So, it is perhaps a societal construct – but in a positive way. We’re assuming that it would be a good thing for the women involved if they become company directors. But if we start with the hypothesis that it is a crappy job that is probably underpaid for the lifestyle compromises involved, it suddenly all makes sense. 🙂

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  4. homepaddock says:

    Paul W – you could be right too, but I hope not.

    PM – enjoy your tea.

    PaulL – you make some very good points but there must be more than that to explain why so few women are on boards.

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  5. PaulL says:

    Why must? Because we need some conspiracy or men to be somehow oppressing women in order to explain personal choices?

    I agree there is a very significant gap, but I see this every day at work. My company wins many awards for being attractive to women, we hire roughly 50:50 (and have for 15 years or more), but by the time we’re 10 years into our careers, we have become about 80% male. I see the promotion meetings, the support groups, everything we do. When I ask my female colleagues and friends why they are leaving, the consistent answer is that they don’t want nor need to work that hard.

    Sure, there are some (a handful) that feel discriminated against, but they’re a small percentage, and from my experience generally they’re the poorer performers seeking a reason that they aren’t as good. The guys in that situation also usually have a bunch of reasons why their performance isn’t their fault.

    I’m not sure there actually has to be anything else to explain it.

    On a similar topic: http://offsettingbehaviour.blogspot.com/2009/05/gender-gaps.html

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  6. homepaddock says:

    PaulL – that would explain some, maybe a lot of the difference but when the gap’s that big, I would be surprised if there weren’t other reasons too.

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