April, 2015


In the Spring of 2015, Executive Search firms from across the globe came together in Bogota, Colombia, for the annual conference of INAC, the international network of search consultancies. One of this year’s themes focussed on women in leadership, debating issues such as gender quotas, board diversity and the differences in approach from region to region.

While there is no doubt that some regions still have very strong patriarchal tendencies, there is some progress being made. According to The International Labour Organisation, Norway boasts the highest global proportion of companies with a woman as a Chairperson closely followed by Turkey at just over 11%. However, it is clear that there is still much work to be done as only around 5% of the CEOs of the world’s largest corporations are women – and the larger the company, the more likely is it that the CEO will be a man.

So what is the answer? For some it is quotas. “Quotas, however unpopular in certain circles, remove the option for procrastination and excuses, and drive change,” says Professor Dianne Bevelander, Director of the Erasmus Centre for Women and Organisations, at The Rotterdam School of Management. “I believe quotas are a good thing precisely because they create the tipping point that fundamentally, and irrevocably, changes the landscape.”

Others regard quotas as nothing more than tokenism and feel that it leads to women being viewed as achieving a board position just because of the law. In fact Peter Grauer, the chairman of Bloomberg L.P., speaking in a recent interview with The Washington Post pointed out that it is up to companies to address the challenges – not the Government: “It starts with recruiting, a pipeline of candidates coming in, and making sure we’re creating the right work environment,” he said. “It’s critically important that the tone is set at the top of the organization.”

There is also, of course, the very strong evidence, such as the report published by the Norwegian School of Business in 2013, that boards with a greater representation of women perform more strongly than those with less gender diverse leadership teams.

The conference brought together leading executive search firms from across the world to debate this crucial issue. The report that follows outlines the different approaches and thinking from a range of organisations, countries and governments citing research from members and academia as well as opinions from thought leaders in the executive talent arena

The conclusions are clear – that in a world where we have hard evidence that more diverse boards make better companies – and that better companies make bigger profits – ensuring that we have more women represented at board level is not just a diversity initiative – it is business critical.

The US Perspective

Susan Shultz runs the global board practice of Executive Search firm SSA Executive Search International. She undertakes board level searches for US clients and will, as a matter of course, always put a woman on her shortlist. “When I did this recently for a New York Stock Exchange listed company, I was told ‘Our culture is not ready for a woman’ – this is what we are up against! Women make up half the workforce and are responsible for 85% of buying decisions – these sorts of attitudes just don’t make business sense.”

So why is it that in an era where we could see a woman as the next President of the United States, only 17% of Fortune 500 board seats are held by women and from an Executive Leadership perspective the numbers are even more dismal with only 23 of Fortune 500 companies having a woman at the helm. That is less than 5%.

Shultz believes that it is a combination of things. “I don’t believe that there is an overt intent to exclude women – I think it is more subtle than that. We haven’t had women executives for that long and so there are generations of attitudes to overcome. Also, we have to recognise that the majority of all Executive Director positions are acquired by referral – often by word of mouth within a fairly tight network, populated by people of the same social circle and who have previous experience on boards - and so by default you tend to get candidates who are like the other members of the board – we like people who are like us.”

However, with a New York Stock Exchange Requirement forcing companies to tighten up the independence of their boards, there is an opportunity to put in place a more robust recruitment process.

But can women sometimes be their own worst enemy? Shultz recounts the story of a female candidate she sourced for the board of a US financial services organisation who was highly competent but who turned down the job because she felt that she wasn’t quite ready. “A man would not have done that. What we often see in men is them saying :’I can do that’ – women tend to need to be asked – it’s about raising our hand a bit more often and recognising that we don’t have to be perfect.”

So what is the answer? While quotas have been popular in other areas of the world, Shultz doesn’t believe that they will be imposed in the US. “I’m not totally against them because we have to start somewhere and our track record is dismal. In the last decade, the percentage of women on Fortune 500 boards has increased by just 3.3%. But will they be introduced here – I doubt it. We have to commit to including at least one woman on a shortlist – that’s not tokenism – that’s about having a shortlist that represents the customer base of your target market – it’s a business case – not a gender diversity issue!”

The Turkish Perspective

According to a recent report by the International Labour Organisation, 11% of Turkish leadership roles are occupied by women. However, while it is among the top 15 countries in the world for female board members, the country still falls behind its European counterparts when it comes to the percentage of women participating in the workforce. So if that is the case why does the country rate so highly for female leadership positions? One of the main reasons is the high number of female entrepreneurs. Women led businesses are relatively common in Turkey and in fact, according to a recent report in Fortune Magazine around 20% of businesses in Istanbul have female leaders and while support is growing, there are still cultural barriers to be overcome.

According to Professor Zeynep Aycan, Professor of Industrial and Organisational Psychology at Koç University in Istanbul, work family balance is one of the most critical issues. “Work family conflict has been found to be associated with guilt, especially by women who feel that they cannot adequately fulfil their roles in the family as prescribed by traditional gender roles in Turkish society.”

However, things are beginning to change, albeit slowly. The Capital Markets Board of Turkey (CMBT) has called for listed companies to have at least one woman on the board and there are efforts to support and invest in female business leaders.

“We are seeing increasing efforts to change from our clients which are both multinationals and Turkish organisations,” says Joan O’Rourke, Partner at executive search firm, OneWorld Consulting in Istanbul. “Companies are increasingly aiming to appoint and integrate more Turkish women into senior roles. Many of our clients recognise that gender diversity in the leadership team and boardroom has a positive effect and gives organisations competitive advantage, not least in attracting top female talent and providing positive role models for young professional women.

The Latin American Perspective

In Latin America, executive search firm AB INAC led by Partner, Sergio Borasino surveyed the largest companies operating in the region (Peru, Argentina, Brazil, Mexico, Colombia and Ecuador) and found that only 30% of executive positions reporting directly to the CEO are held by women.

Clearly then, in general terms there is still room for improvement. In Peru and Colombia, women held 28% of executive positions outperforming both Brazil and Argentina (26% and 23% respectively). However, they come in considerably below Ecuador, with 33% and Mexico, the regional leader at 37%.

“We have quotas in Mexico,”says Nancy Ramirez, Partner of executive search firm Strategic Talent. “We need to present one woman out of every three candidate shortlist, which means more opportunities for women without compromising the need for the best talent.” The firm has also set up a network called Wo/Men[In] specifically designed to bring together all stakeholders – companies, talent, educational establishments and government - to promote the business case for gender diversity.

This reality is directly linked to the policies instituted in companies. In Latin America, only 28% of companies have a gender equality policy at executive level that is carried out rigorously. Of this group Mexico has the greatest percentage of companies with such policies (42%), followed by Peru (40%). The remaining countries come in below 31%. This reflects the still-pervasive gender inequality, given that 72% of organisations lack a clear-cut gender equality policy, or if they have one, do not enforce it.

Interestingly, while only 30% of executive posts are held by women, 93% of those surveyed felt that having more women at executive levels was very important, ideal, or necessary and mandatory. It is clear then that the current employment landscape for women is not conducive to keeping - and encouraging - female talent at the highest levels. The answer is a complex one and involves not only implementing family friendly working policies, but also raising awareness of the importance of women in leadership at early stage education.

The Norwegian perspective

While Norway is seen as one of the most progressive countries, having implemented board quotas in 2003, there are differing views as to how successful this has been. While over 40% of board members of public companies are female (they have to be otherwise companies face the prospect of being closed down), the number of female CEOs at the largest companies in the region is still very small.

Apparently, Norwegian companies so resisted the idea of appointing women to their boards that 384 of the 563 publicly traded companies subject to the quota became private to avoid complying.

The good news is that the country ranks top in terms of the percentage of women participating in the workforce and according to some, it is consequently only a matter of time before more leadership positions are given to women. “We are often asked to look for women specifically for board and corporate leadership appointments”, says Jo Skjelstad a Partner at search firm Visindi AS.

And while Norway may have been a pioneer in terms of the gender diversity debate, the country has not rested on its laurels. “There is still a lot of discussion around initiatives to encourage more women into executive careers”, says Skjelstad. “Our own experience, which is backed up by research, tell us that often women choose a different career path (part time, for example) and so it is important to make sure that the environment is right for women to be able to succeed.

The Australian Perspective

In Australia quotas are discussed roundly in the press, but only the State Governments have been firm about trying to ensure that 50% of Board positions on Government and Government related boards are occupied by women. No such formal targets have been agreed in the Federal Government nor in the private sector. However, since 2011 ASX listed companies have had to report on an 'if not, why not" basis in relation to the establishment of a diversity policy at senior executive and Board level, and measure themselves each year against the policy.

So, while there are no formal targets, almost a quarter of directors of the top 50 ASX listed companies are female – and every single company has female directors on the board. “From a recruitment perspective, I have always held that the best person for the job must be appointed – regardless of gender,” says René Johnson, MD of Pacific Search Partners. “My stats reflect 51% male and 49% female over the past five years. That said, I think there is a solid case for ensuring our shortlists contain a solid balance of gender where possible. There are some outstanding female Directors in Australia so it shouldn’t be hard to achieve this.”

Johnson believes that change can happen naturally; “We should let the market recognise the value of having gender diversity in the boardroom and the numbers will swing naturally – and they are doing so.”

The figures certainly seem to reflect this and there are also a number of initiatives designed to get the numbers even higher. The pressure group Women on Boards is working to both lift the quantity – and quality - of female directors, and to ensure the issue has plenty of airplay in the national press. Equally, the Institute of Company Directors in Australia has a specifically designed mentoring scheme for aspiring female Directors which is getting great reviews by the candidates and the mentors alike.

The Slovakian Perspective

According to a Eurostat labour Market Survey, only 13% of board positions in Slovakia are occupied by women and in general, the employment rate for women is lower than it is for men. Even part time employment at around 6% is well below the EU average of 32.5% reflecting the low availability of part time positions and the country has one of the lowest employment rates for mothers. While parental leave is available for both parents, only 1-2% of men take it.

This gender imbalance in the workplace is also reflected at Government levels with no women ministers in Government.

“There is pressure for women to stay at home and look after their children until they are at least 2 or 3 years old,” says Mariana Turanova of Target Executive Search. “That is naturally a setback career-wise. This can often affect confidence levels and ambition – they don’t feel they can make it to board level and so don’t apply for senior positions.”

There are no quotas or targets in place for Slovakian companies and the regulations for advertising are strict in terms of appointments being open to both genders although a few – mainly US companies – will ask for women to be included on the shortlist.

Clearly then, there is room for improvement, but there are obviously deep cultural barriers to be overcome first.

The UK Perspective

The recent publication of the latest “Women on Boards” report has thrown the issue of workplace diversity right back into the spotlight. This Government initiative started back in 2011 when firms were told to more than double the number of women on their boards by 2015, or face Government measures. Since then there does seem to have been progress with the latest report showing that women account for 20.7% of board positions in the FTSE 100, an increase from 12.5% in 2011 and 17.3% in April 2013.

“This is, on the face of it, good news,” says Paul Hunt, Managing Director of search firm Healy Hunt. “But I think it is disappointing that this is an average figure across executive and non-executive directors and in fact only 8.6% of executive directors are women – and that’s only up from 6.8% last year - so is this just tokenism?”

As the latest report points out: “Gender balance makes good business sense. Women make up over half of the UK population, account for nearly half of the working population, outperform men educationally and are responsible for the majority of household purchasing decisions. Women are as successful as their male counterparts at university and in their early careers, but attrition rates increase significantly as they progress through an organisation. The under-representation of women in senior roles and at board level impacts the performance, governance and reputation of companies, as they fail to attract and retain the widest possible range of talent.”

It is clear then that the UK hasn’t made quite as much progress as it likes to think – this is still a long term journey and the country has to ensure a sustained pipeline of talented women if it is to achieve true parity at the top.

While The European Parliament voted in favour of quotas last November, the 28 member states of the European Council have reached deadlock on this matter – it remains to be seen what the next UK Government’s view will be.

The African Perspective

According to the International Labour Organisation only 3.6% of CEOs of publicly listed companies in South Africa are female – a point echoed in a recent survey by PwC which also showed that at board level, the gap between male and female executive directors widens according to industry type. According to the report, the financial services sector is heavily dominated by men at board level (85%) and in the resources sector only 13% of executive roles are occupied by women.

“While professional women have become more sought after, CEO positions have remained an almost exclusively male domain, “says Siviwe Shongwe, Director of South Africa based Fusion Consulting. “The subject of tokenism is highly emotive and complex and one should guard against generalisations, but we believe that corporate leaders would agree that there is a need for greater transparency to ensure more women are brought into the recruitment processes for these positions. Search firms have a crucial role to play in this regard. In our experience, directors are often recruited through personal friendships and contacts and more transparent and formalised recruitment processes could ensure that a more representative pool of potentially suited individuals are considered.”

Shongwe believes that a larger pool of suitably qualified women is also needed and that investment in developing skills and capability at leadership level is the only answer. “There are numerous initiatives throughout Africa such as the “Women on Boards” director development programme. There is also a focus on developing and supporting women entrepreneurs, which makes tremendous sense from a socio-economic development perspective. According to Ventures Africa, sub-Saharan Africa has the highest number of female entrepreneurs. Whilst these women are often small business owners, investment support and development could potentially bring millions out of poverty and reduce the alarming gender income gap seen on the African continent.”


From a global perspective it seems that there is still much work to do. And while quotas may seem to be the way forward, in some countries this can pose problems with rumours of Indian CEO’s appointing their wives to the board in order to ‘tick the box’ .

There are also the inevitable cultural sensitivities in regions such as The Middle East which may hamper the role of women as leaders for some time to come yet. But even this challenge does seem to be one that can be met. As Dr Connson Locke, of the Department of Management at the London School of Economics says: “The Middle East is a collection of very different countries and cultures, but one thing they have in common is the importance of personal relationships to doing business. This can be particularly challenging for women who might not feel welcome or comfortable taking part in male-dominated leisure activities. Women need to be aware of the importance of relationship and find other ways to build their network, and organisations can also help by arranging company-sponsored networking events.”

In Asia, female students account for around 50% of the graduate cohort but, according to a report by McKinsey on ten APAC markets, women account for only 6% of seats on corporate boards. While the efforts by Government to maximise and sustain a strong and local workforce may increase these numbers, the projected percentage for female directorships in 2030 is still only 17%.

The debate about quotas is likely to rage on - but with progress being made in countries such as the UK and Australia without them, perhaps the answer is to look at initiatives to not only supply the pipeline of female talent – but also ensure that that it is retained.

About INAC

INAC is an international network of 40 independent specialist executive search firms located in 45 countries with over 200 consultants. For well over 20 years the network has been fulfilling clients’ senior talent requirements across a diverse range of industries and functions. Through unrivalled local expertise and global reach, INAC member firms harness their knowledge and extensive contacts sharing a passion for best practice and professionalism. The aim is to deliver to clients a personalised and consultative service.

The annual Global Assembly brings member firms together from across the globe to discuss topics pertinent to the world of Executive Search, enhance best practice and develop strategies to provide the best result for their clients.

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