On International Women’s Day, a new report based on Grant Thornton’s annual survey of 5,500 businesses in 36 economies reveals the global proportion of senior business roles held by women has hit a high of 25%.
However, the findings show that progress remains slow. The figure for 2017 is an increase of just one percent from 2016, and the proportion has only improved six percent in the 13 years since the research began.
In addition, the percentage of businesses globally with no women in senior management has also risen, from 33% in 2016 to 34% in 2017. As the issue of uncertainty dominates the business agenda in 2017, Grant Thornton’s report, Women in Business: New perspectives on risk and reward, highlights the importance of gender diversity in senior teams tasked with managing risk.
Francesca Lagerberg, global leader for tax services at Grant Thornton International Ltd, said: “This year, businesses have reached a milestone, with a quarter of senior roles held by women for the first time. But this is a marginal improvement and we’re still only halfway there. Despite evidence linking diversity and improved business performance, the global dial is shifting at a painfully slow rate. This is a real concern for business growth as it suggests we aren’t maximising the potential out there.”
Grant Thornton’s data shows developing regions continue to lead the charge on diversity with developed economies lagging behind. Eastern Europe performed best, with 38% of senior roles held by women in 2017, up from 35% in 2016, and the percentage of businesses with no women in senior management falling from 16% in 2016 to just 9% in 2017. Meanwhile the MINT economies (Mexico, Indonesia, Nigeria and Turkey) saw the most improvement, with the proportion of senior roles held by women rising from 24% in 2016 to 28% in 2017 and the percentage of businesses with no women in senior management falling from 36% in 2016 to 27% in 2017.
This is a significant contrast to the major economies of the G7, which have remained static with 22% of senior roles held by women and 39% of businesses with no women in senior management.
The research reveals that the individual countries with the highest proportion of senior roles held by women are Russia (47%), Indonesia (46%), Estonia (40%), Poland (40%) and Philippines (40%). The countries with the lowest proportion of senior roles held by women are Japan (7%), Argentina (15%), India (17%), Germany (18%), Brazil (19%) and the United Kingdom (19%).
Francesca Lagerberg comments: “The data for major economies is particularly discouraging. For instance, over the last year Canada saw the proportion of senior roles held by women fall from 26% to 23% and the percentage of businesses with no women in senior management rise from 27% to 29%. And the UK saw the proportion of senior roles held by women drop from 21% to 19%, plus the percentage of businesses with no women in senior management increased from 36% to 41%.
“The reasons for this lack of progress are many and varied, and they depend on the culture of individual businesses and the broader culture of the country or region in which they sit. However, this year we encountered a concerning sense that the issue has plateaued, as companies perhaps assume the diversity challenge has been dealt with. The evidence tells us this is not the case.
“Companies today need to be more productive, more innovative and in many ways more open if they are to grow. Diversity will be key to their success. Those that remain closed are putting themselves at risk of not tapping in to their full potential, and losing access to diversity of thinking.”
Grant Thornton’s survey also reveals the types of senior management roles women hold, and finds that the number of female CEOs is on the rise. While the most common roles for women are still Human Resources Director (23% in 2017) and Chief Financial Officer (19% in 2017), Chief Executive Officer / Managing Director is now third at 12% in 2017, up from 9% in 2016.
Francesca Lagerberg comments: “It is encouraging to see a rise in the number of women in the leading executive role. In particular, I’m pleased that the G7 has made progress in this area, with the proportion of women as CEO rising from 7% in 2016 to 11% in 2017. This gives a spark of hope that there is some change coming through.”
Grant Thornton’s report highlights that the increase in businesses without gender diversity in senior management comes at a time when companies face increasing levels of uncertainty. It explores the role of gender when it comes to spotting and managing risks, by either seizing the opportunity or managing the threat that risk can bring.
The research shows that men and women see risks and opportunities through a different lens, which provides a diversity of thinking when combined together. The data reveals that women overall see lower levels of risk when considering aspects of organisational and commercial life such as political or economic change, as well as lower levels of opportunity. Women are also less inclined than men, according to the survey, to take action in the face of an unforeseen risk that threatens their organisation’s commercial performance.
Francesca Lagerberg said: “Our research challenges the presumption that women are risk averse and will therefore see high levels of risk in the business world. It suggests that women will not rush to label a situation as a risk and mitigate it. Instead, they will consider the context and nuance fully, and respond in ways that recognise the wider environment and the impact their decision will have on people as well as on the bottom line.
“Uncertainty is high on the business agenda in 2017 so these differences in approach and viewpoint can be a strength for companies. The international business environment has become more volatile, and the ability to manage uncertainty is becoming more important. Diversity of thinking at the senior level gives management teams a wider peripheral vision of what constitutes a risk and provides a more balanced approach for reacting to it, either as an opportunity or a threat. Gender diversity in firms’ decision-making teams could ultimately be the difference between reaping success or failure.”