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Gender parity will not be attained this century says WEF

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Gender Parity Image

None of us will see gender parity in our lifetimes, and nor likely will many of our children. That’s the sobering finding of the Global Gender Gap Report 2020, which reveals that gender parity will not be attained for 99.5 years.

Why gender parity matters

Gender parity has a fundamental bearing on whether or not economies and societies thrive. Developing and deploying one-half of the world’s available talent has a huge bearing on the growth, competitiveness and future-readiness of economies and businesses worldwide.

The index’s rankings offer an effective means to benchmark progress. They are designed to create global awareness of the challenges that gender gaps pose, as well as the opportunities that emerge when action is taken to reduce them.

Political representation on the rise, but is it enough?

Political Empowerment

Now in its 14th year, the Global Gender Gap Report 2020 benchmarks 153 countries on their progress towards gender parity in four dimensions: Economic Participation and Opportunity, Educational Attainment, Health and Survival and Political Empowerment. In addition, this year’s report examines gender gap prospects in the professions of the future.

The report presents a decidedly mixed picture. Overall, the quest towards gender parity has improved, ducking back under a century and registering a marked improvement on the 108 years in the 2018 index. Greater political representation for women has contributed to this, but overall the political arena remains the worst-performing dimension.

At the other end of the scale, it is forecast to take just 12 years to attain gender parity in education, and in fact, overall, gender parity has been fully achieved in 40 of the 153 countries ranked.

The “role model effect” reaps dividends at the top …

Drilling down into the facts and figures, it will take 95 years to close the gender gap in political representation, with women in 2019 holding 25.2% of parliamentary (lower-house) seats and 21.2% of ministerial positions.

Positively, the so-called “role model effect” may be reaping dividends in terms of leadership and wages. Improving political empowerment for women has, as a general rule, corresponded with increased numbers of women in senior roles in the labour market.

Women on Boards

… but not lower down

In contrast to this positive progress in the lofty world of leadership, women’s participation in the wider labour market has stalled and financial disparities are increasing. Globally, the trend is towards a deteriorating picture in emerging and developing economies, which is offsetting the gains made in OECD countries.
Although education attainment as well as health and survival enjoy much closer to parity (96.1% and 95.7% respectively), one important area of concern is that of economic participation and opportunity. This is the only dimension where progress has regressed. Here, the figures are sobering, with a deteriorating situation forcing gender parity to a lowly 57.8%, which in time represents a massive 257 years before gender parity can be achieved.

The report highlights three primary reasons for this: women have greater representation in roles that are being automated; not enough women are entering professions where wage growth is the most pronounced (most obviously, but not exclusively, technology), and women face the perennial problem of insufficient care infrastructure and access to capital.

Working towards a better outlook for future jobs

Looking to the future, the report reveals that the greatest challenge preventing the economic gender gap from closing is women’s under-representation in emerging roles. In cloud computing, just 12% of professionals are women. Similarly, in engineering and Data and AI, the numbers are 15% and 26% respectively.

Gender Parity in Professions

To address these deficiencies, workforce strategies must ensure that women are better equipped (in terms of improved skills or reskilling) to deal with the challenges and take advantage of the opportunities of the Fourth Industrial Revolution. Diverse hiring is another area for improvement (reflecting the current situation that sees gender parity in an in-demand skillset but not equal representation), along with creating inclusive work cultures.

Best in class

The top country for gender parity remained Iceland (for the 11th year running).

The most-improved countries were Albania, Ethiopia, Mali, Mexico and Spain.

Of the 149 countries ranked, 101 improved their scores on the 2019 index (this excludes the five new countries that have joined the ranking this year).

A further 48 saw their performance unchanged, while the top 10th percentile saw their scores improve more than 3.3% year-on-year.

A total of 35 countries have achieved gender parity in education.

In healthcare, 48 countries have achieved near-parity and 71 have closed at least 97% of the gap.

Could do better

Globally, gender parity stands at 68.6% and the bottom 10 countries have closed just 40% of the gender gap.

Political empowerment scores are poor. In terms of parliamentary representation, globally women have secured just 25% of available positions, a figure that slips to 21% at a ministerial level. At this level, there are nine where they have no representation.

In the past 50 years, 85 states have had no female head of state.

In terms of economic participation, the gender gap will take 257 years to close (compared to 202 years in the 2019 report).

Globally, only 55% of women (aged 15-64) are engaged in the labour market as opposed to 78% of men.

There are 72 countries where women are barred from opening bank accounts or obtaining credit.

There is no country where men spend the same amount of time on unpaid work as women. In countries where the ratio is lowest, it is still 2:1.

The Pay Gap

Trends

By region, Western Europe has made the most progress on gender parity (standing at 76.7%), followed by North America (72.9%), Latin America and the Caribbean (72.2%), Eastern Europe and Central Asia (71.3%), Sub-Saharan Africa (68.2%), South Asia (66.1%) and the Middle East and North Africa (60.5%).

These figures, however, mask several key trends, which have a significant impact on the time to gender parity. In North America progress stalled during 2019, while further south in Latin America and the Caribbean, several countries performed strongly over the course of the year.

How to get ahead

This year’s index highlights areas where policy-makers need to focus greater attention. At the federal level, greater political representation – and in some nations, any representation at all – for women is a pressing need.

Looking ahead, policy-makers need to take action to better equip younger generations – particularly in developing nations – with the skills to succeed in the world of future jobs. Increasing formal education attainment is necessary – and the strong gender parity in this area to be applauded – but it is insufficient to provide young men and women graduating from every level of education with the types of skills needed for the Fourth Industrial Revolution’s job market. In this respect, gender gaps remain and are likely to become exacerbated unless addressed now.

 

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Step-change needed for women in senior leadership roles

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This year’s Hampton Alexander Review, published today shows the strongest year of progress since targets were first set in 2011:

  • FTSE 100 on track to reach the 33% target for women on boards ahead of the 2020 deadline o FTSE 250 made strong gains during the year and with sustained effort, will also meet the 2020 deadline
  • Last year’s challenge to “One & Done” boards is having an impact: there are 39 “this year, down from 74 with only 2 All-Male boards remaining

However, a step-change is needed for senior leadership roles below board level

50% of all appointments next year need to go to women, or the 2020 target will not be met.

The report  shows that women now hold 32.4% of all FTSE 100 board positions, up from 30.2% last year and up from only 12.5% in 2011. The FTSE 100 is very close to meeting the 33% target for Women on Boards and will do so ahead of the 2020 deadline.

The report also shows that women hold 29.6% of all FTSE 250 board positions, up from 24.9% last year and only 7.8% in 2011. The FTSE 250 has had its strongest year yet and if the same rate of progress continues next year, the FTSE 350 will be on track to meet the 33% target by the end of 2020 deadline.

Not all companies are making the same efforts, and the gap between those working hard to improve gender balance and those doing little, is each year more obvious.

Only two All-Male Boards remain

Following successful campaigning and pressure from investors in the year, “One & Done” boards have reduced from 74 to 39 this year. This includes 11 new entrants to the index but 28 companies feature for the second year running.  Only two All-Male boards remain, down from 5 this time last year and 152 in 2011.

Sir Philip Hampton, Chair of the Review said:

This is the penultimate Hampton-Alexander Report and we enter our final year with great momentum behind us, but we are still a long way from reaching the target for women in senior leadership roles below board level.

Denise Wilson, Chief Executive of the Review said:

There are over 900 women now serving on FTSE 350 boards, providing an ever-increasing pool of women with substantial board experience, yet only 25 women have been appointed into the Chair role, even fewer as women CEOs and showing little sign of change.

The very senior jobs were always going to be the hardest of challenges, however a stronger focus is now required at every stage of the appointment process to address the reasons why top jobs aren’t going to women”

Chris Cummings, Chief Executive of the Investment Association said:

Investors have been consistent in their demands for greater diversity. It’s not just a nice to have. The research is clear: firms with diverse boards and management teams make better decisions, drive innovation and outperform their less diverse peers.”

Melanie Richards, Deputy Chair at KPMG UK said:

Behind the numbers and trends are hundreds of individual stories. Women who have overcome barriers that they should not have had to overcome, with leaders and boards who have worked hard to remove those barriers for current and future generations.”

Carolyn Fairbairn, CBI director general, said:

If all male boards are to become a thing of the past, firms must not take their foot off the pedal.”

She added that firms were “making less progress on the executive pipeline”.

We are still seeing too few women in senior leadership positions, whether as chief executive or running divisions.”

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We cannot wait until 2090 for gender balance on executive committees

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Another wasted year

Despite the Government setting a target of 33% women in leadership roles at FTSE 350 companies by 2020, and despite a flow of formal reviews, The fourth consecutive report, Women Count, produced by Pipeline shows there has been little to no progress. This independent report of the FTSE 350 has found that:

  • Only 3.7% of companies have female CEOs – and this is down from 4.6% two years ago
  • More than 85% of companies have no women executives on their main boards#
  • Only 9% of executive directors on main boards are women, unchanged since 2017
  • A mere 17.1% of executive committee members are women, a tiny increase of just 0.8% since 2018
  • One in five companies have no female members of their executive committees at all
  • At the current rate of progress, it will be almost 2090 before executive committees achieve gender balance#
  • Just 5% of executive committee positions are held by women in roles with profit and loss2 (P&L) responsibility
  • More than half of FTSE 350 companies have no women on their executive committees in a P&L role at all
  • This situation is replicated on the main indices of major economies across the world, with India and Germany having no women CEOs at all, while China, Hong Kong, the USA, Spain and France have only one each

The fact is that many FTSE 350 companies are failing to offer talented women access to key executive positions as such opportunities continue to be given automatically to men.

Why does this matter?

Evidence shows that the failure to draw on a wider pool of ability actually damages the companies themselves. Those FTSE 350 companies with 25% or more women on their executive committees last year achieved an average 16% net profit margin3 while those with no women achieved just 6%. P&L roles are the pipeline for future CEOs and if women are blocked at that stage then they will not get the chance to run companies and companies will not get the chance to benefit from their broader talent pool.

Why don’t companies address the problems of gender imbalance?

Where there are already women at the top of companies, the evidence shows they are much better at progressing other female talent. Research reveals that women CEOs have twice the average number of women in executive positions than their male counterparts, and FTSE 350 companies led by women have an average of seven times more female executives on their main board than those led by men.

It is hard not to conclude that where men are in charge, they tend not to want to let go of their grip and allow women a share of the action.

6 Key Facts

1: Business performance is maximised when they promote women

2: Women on executive committees

3: It’s not just about numbers, the type of role matters

4: Female leaders succeed at progressing all talent, where male CEOs fail

5: Company boards remain a male executive preserve

6: Across the globe, it’s still a man’s world

4 Recommendations

  • MAKE IT THE CEO’s RESPONSIBILITY
  • ESTABLISH HARD TARGETS
  • TRANSPARENCY IS KEY
  • GOVERNANCE

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Read more about The Pipeline

Hospitality, travel and leisure sector improves gender diversity

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This year’s Women in Hospitality, Travel and Leisure 2020 Review shows improvement on gender diversity over the past year.

New analysis of gender diversity in the hospitality, travel and leisure sector shows the industry has made positive progress in the past year to address the number of women in senior positions. While improvements have been made, there is still work to be done to meet the 33% target of female representation across boards and executive committees by 2020, set by the Hampton-Alexander review.

The report shows the percentage of women in board level positions at FTSE 100 hospitality, travel and leisure companies increased to 32%, up 3% from 29%, slightly better than the cross sector average of 30%. There has also been improvement on the number of women holding executive committee and direct report positions (into the Executive Committee) in companies.

The sector review, led by Tea Colaianni, Chair of WiH2020, an independent cross-industry body supported by firms including PwC and The MBS Group, assessed the progress companies have made since gender pay reporting became mandatory for companies with over 250 employees in 2017. A total of 120 companies were interviewed and their data analysed as part of the review.

Tea Colaianni, Chair of WIH2020, said:

The FTSE 100 is one of the strongest performing groups of the hospitality, travel and leisure sector for gender diversity and the improvements they have made mean they are just shy of meeting the 33% target for women on boards.

However, there is a widening gap between those who are performing well and those who are not. Currently, only a quarter of companies are at target for both board and executive committee/direct report measures.

Progress in percentage of women in board level positions

FTSE 250 companies also saw an increase in the percentage of women in board level positions (22% vs 20% last year). Overall this percentage remains below the cross-sector average of 25%. However, for Executive Committee and direct reports, the FTSE 250 is outperforming the sector average of 25%, with a figure of 27.8% – marginally down in comparison to last year.

There has been encouraging progress in the number of women non-executive directors (NEDs) with the rate at which women are appointed to NED roles over the past 12 months reaching 62%. Across the FTSE 350, 40% of NEDs are women. The number of women who are direct reports across the whole sector has reached 36%.

Elliott Goldstein, MBS, said:

This year, for the first time, there are now no all-male FTSE 350 hospitality, travel and leisure boards, which is a good step in the right direction. But this is not the time to get complacent. The vast majority of companies are below the cross-sector target for gender diversity on at least one key measure showing there is still work to do. Meanwhile, our research shows that just 1 in 33 leaders in the sector are from a BAME background, well below the cross-sector average so it is clear our sectors have much more to do to ensure true diversity.”

Improvements needed in BAME representation

The research shows areas that need focus to drive further improvement should include addressing the lack of women in key leadership positions, with just 7% currently holding the title of CEO across the sector in the FTSE 350. In addition, the number of people from a black and ethnic minority background is vastly underrepresented in the sector, with just one in 33 leaders (combined board, executive committee and direct report) in the industry identifying as BAME. With the UK Government launching a consultation on mandatory ethnicity pay gap reporting in October 2018, this is clearly an area that will be increasingly be in the spotlight for businesses in the coming months and years.

Jon Terry, Diversity and Inclusion Consulting Leader at PwC said:

Overall there has been encouraging progress across the sector, but there is still much work to do to increase the number of senior women and people from other diverse backgrounds. A focus on ensuring that everyone has equal opportunities to progress and for firms across the sector to better reflect their customers, brings benefits to business as well as to society.

Tea Colaianni concluded:

The statistics in the review show some encouraging progress, although more work needs to be done by many companies to achieve sustainable change. The report also sheds light on a number of never seen before collaboration initiatives across the sector such as Comeback to HTL, the ground-breaking first ever cross industry returners programme.

The number of talented women not returning to the sector after a career break is remarkably high. Comeback to HTL aims to welcome returners back to the industry, provide the appropriate level of support and flexibility and help them fast track their career to senior levels. The hospitality, travel and leisure industry, the third largest private employer in the UK, should and can lead the way in this area.

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When it comes to women on boards it’s time to move on from one-and-done

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Half the appointments to board positions in the FTSE350 will have to be filled by women over the next two years

Figures in this year’s Hampton-Alexander Review report, reveal that the companies which make up the FTSE100 index are on track to hit the 2020 target (women occupying one-third of Board places) with more than 30% of board positions occupied by women. This has risen from 12.5% in 2011. However the Review also reveals that just under half of the index are currently underperforming on gender at board level. Swift action is needed now.

As for the FTSE 250 it stands at 24.9% up from 22.8% in 2017 but unless progress picks up considerably in the next two years, it is unlikely to meet the 33% target in the 2020 timeframe. Progress in the FTSE 250 should arguably be faster than the FTSE 100 given its lower starting place. However, this has not proven to be the case over time.  Indeed, some companies have slipped back!

Within the FTSE 350 the picture is different. Almost one in four companies have only one woman on their board, and there remain 5 all-male boards.

The one piece of good news in these figures is that half the appointments to board positions will have to be filled by women over the next two years to hit the targets.

What needs to be done?

Addressing workplace behaviours

The Review reveals that companies pushing boundaries this year have turned their attention to workplace behaviours. They are lifting the lid on those micro-regressive behaviours, every day language and practice that unintentionally or otherwise, signal to women that their careers matter less and help reinforce deep-rooted cultures that reward and support the progress of men in the workplace.

These behaviours are reported as

  • Assuming women sort the HR matters, organise socials, leaving cards, write up the meeting notes –all the dross list.
  • My boss micro-manages my performance, in a way he wouldn’t dare do with male colleagues
  • Being called “the girls”.
  • Watching mediocre guys coast to high ranking positions based on likeability.
  • As soon as I announced I was pregnant they started ignoring me and my work.

Improving the Executive Search Community

13 Executive Search Firms that have qualified this year under the Enhanced Code of Conduct. These are the firms in the UK who are currently appointing more women than most to British boards and working hard to shift gender balance at the top. The Standard Voluntary Code of Conduct has been signed by over 40 UK search firms working to increase diversity at board level on FTSE 350 companies. This code sets out entry-level best practice on gender balanced recruitment and following publication of the Parker Review in 2016, also includes ethnicity.

Pressure from the Investor Community

Investors are increasing pressure on FTSE boards with a lacklustre approach to tackling diversity and this momentum has started to show clear results.  Investors now see gender diversity as a core and critical business issue that boards and leadership teams should address. Companies with a diverse management team and pipeline make better decisions, drive innovation and are better positioned to deliver long term sustainable returns for investors.

One-and-Done

It’s time to call out the 75 companies that with ‘One & Done’ boards, including one newly formed FTSE 100 company.  Previous research has shown having a single female on the board is not effective and thee days, having one woman is little different from having none.  Neither is it acceptable to say “we’ve had a woman (so we don’t need to have one again)”.

Consumer Boycott

Many media commentators are calling for a consumer boycott of those companies the Review considers to be “poor performers” at both Executive Committee and main Board levels.  This many well be easier said than done as many are not Business to Consumer organisations. However, there are comprehensive lists of “poor performers” including companies with NO men on Executive Committees and those companies with no woman sitting at main board level.

Women in the City comment:  This Report is well worth reading – lots of facts and figures.  If you’re looking for new roles, you can pick out those companies that are taking seriously the progress of women (and potentially avoid those that aren’t) and if you’re seeking Board roles, there are plenty of FTSE 350 companies that will need women in the next two years.

Check out our Project Diamond micro-website for information on becoming board-ready.

 

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