For A topic that attracts so much attention, there’s a surprising dearth of academic research into the rise of women to the boardroom, and particularly the conditions that enable (or inhibit) women’s progression globally. The literature tends to be focused on single countries (80 per cent on the US), on the controversial topic of quotas, or based on surveys rather than data. Inevitably, our individual or national biases colour our interpretations of these studies, making it hard to objectively assess what works – and what doesn’t.
And those reports that do look across multiple countries are usually simply snapshots, comparing the existing percentages of women in key positions, rather than addressing the question of why variations exist.
Last year, because we felt there was a significant gap in the analysis, BNY Mellon Investment Management and Newton commissioned new research from University of Cambridge Judge Business School. The brief we gave professor Sucheta Nadkarni was to see if global variations in the rise of women to the boardroom could be explained by analysing cultural, legislative, economic and political factors across a wide range of countries.
Importantly, this work was based on original data to ensure objectivity. A vast information set was constructed from over 1,000 companies across 41 countries, spanning six continents and more than 50 industries, over the decade from 2004 to 2013. Women’s rise to the boardroom was measured in two ways: the percentage of female board members and the longevity of their tenure. For female board members to make an impact, they need to stay on the board – otherwise their presence could be tokenism, rather than representing serious efforts towards developing gender diversity.
The initial results of this research were unveiled yesterday at a conference on “Womenomics”, hosted by BNY Mellon Investment Management and Newton as part of our build-up to this Saturday’s historic Women’s Boat Race, the first to take place on the Tideway alongside the men.
The study’s most striking finding is that female economic power (expected years of girls’ education and percentage of women participating in the labour force) is one of two factors having the greatest positive impact on both the percentage of women on boards and longevity. Empowering women outside the boardroom is key to getting women into the boardroom – and keeping them there. Maternity provisions and female political power reinforce this virtuous circle.
This result, combined with evidence that companies with more female directors are also more likely to be socially responsible, suggests that the success of women at one level can reinforce the success of women at other points in the career journey. This is a strong message. It also corroborates our experience in the UK. Over the past four years, the doubling of women directors on FTSE 350 boards has unleashed a new resolve to develop female talent at all organisational levels, with efforts now extending right back to the classroom.
The other main driver of women’s progression to – and tenure in – the boardroom also echoes the UK experience. The study reveals that including a requirement for gender diversity in a country’s corporate governance code outweighs the limited value of mandatory quotas – which unsurprisingly get women on to the board but have no bearing on their ability to stay there.
And finally, the study confirms that national cultural dimensions matter greatly but suggests that they have a more nuanced impact than is often assumed. For example, countries with a more humane orientation – such as Sweden and Finland, where nurturing, altruism, generosity and caring are all highly valued – are likely to have higher numbers of women on boards than, say, Germany. However, Germany’s more assertive culture appears to help those few women who make it to the board to stay there.
The increasing impact of the global context also makes for a more complex relationship between national and international drivers – and this issue does not fall neatly into a developed-emerging market dichotomy. In a networked world, no country or company is isolated from wider societal change.
Technology and globalisation are two well-established megatrends. As the ascendancy of women becomes a third, those countries, companies and individuals creating a faster pace of change are likely to enjoy a distinct competitive advantage. This rigorous global study shows that helping all women to progress improves the representation of women at the top – and vice versa.