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Making room for women on boards

Edition Number: 
1273
women on boards
Women’s equality can add $12 trillion to global growth
From Date: 
Mercredi 15 Février 2017
To Date: 
Mardi 21 Février 2017

Women make up for less than 7% of representation in boardrooms in Mauritius. A sad reality, one that undermines the country’s potential to achieve high-income economy status.

On March 8, we will be celebrating the International Women’s Day. The issue of gender diversity and equality will be at the core of debates. In the corporate world, the status of gender diversity at board level is particularly distressing with less than 7% female representation on boards in Mauritius, accor-ding to data sourced by the Mauritius Institute of Directors (MIoD). This is one of the many reasons why the country lags behind as compared to similar economies and in its endeavour to graduate from a middle-income to a high-income country, observes Juan Carlos Zara, Chief Executive Officer (CEO) of the MIoD.

It is not only on the island that women hold a small number of corporate board seats. In 2015, the 2020 Women on Boards Gender Diversity Index of Fortune 1000 Companies showed that 17.9% of corporate directors were women. This is a small number when you consider that women comprise about half of the total US workforce; hold half of all management positions; are responsible for almost 80% of all consumer spending; and account for 10 million majority-owned, privately-held firms in the US, employing over 13 million people and generating over $1.9 trillion in sales.

Simply put, companies in Mauritius need more women at senior positions, states Juan Carlos Zara. It is in relation to this that the MIoD is organising a one-day conference on February 28 to launch its Initiative for Gender Diversity in Leadership, whose aim is to address the causes of the under-representation of women on boards, and follow up on the different solutions and outcomes of this seminar.

 

Need for improved day care facilities

Three reasons in particular have been identified by the MIoD and on which working groups will be set up to follow through. They are namely, day care infrastructure, work life balance and women on boards. According to the findings of the MIoD, there are limi-ted facilities in Mauritius to provide support to young mothers, who have limited support for childcare. Once they have children, they may choose to stay home or step back from greater responsibility in the workplace. Day care facilities should be provided so that young mothers stay in the workforce and have the option to move higher in the hierarchy.

The second cause for obstruction is one that affects most working force but women in particular since they are seen as the prime care takers of their children and need flexibility (from time to time) to accommodate their role as mothers. Companies want more women in the workforce but penalise the careers of women who cannot provide 100% commitment. Women remain predominantly at low and middle positions and do not climb up all rungs in the hierarchy. Unequal pay also acts a deterrent. Companies should provide flexibility to women in their workforce to cope with their realities as mothers, suggests the MIoD.

Thirdly, without making it to middle and higher positions (as an inevitable result of being penalised), the pool of women for board positions is limited. Boards are reinforced in their beliefs that women do not belong there and cannot add value. Companies lose on the opportunity to have diversity of opinions on their boards and hence lose the potential to increase innovation, returns and profitability. Companies need to see the business case and the board culture must adapt in order to accommodate different views, suggests the MIoD.

For Susan Coles, Australian ambassador to Mauritius, the business case for gender diversity explains for itself. Australia, she states, has been active in this space. Indeed, the Australian go-vernment has committed to a new gender diversity target of women holding 50% of government board positions overall, and women and men each holding at least 40% of positions at the individual board level, which took effect from July 1, 2016.

Currently, Norway leads with 35% of women on boards, followed by Finland at 30%, France at 29% and Sweden at 27%.

One could argue that positive discrimination could be the solution, but then a 50-50 approach has to be adopted. It is highly ironic that with women ma-king 52% of the population, talks of a 30% only quota for women in Parliament and in political parties (even the recently launched ones) are highly acclaimed.

In 2015, the McKinsey Global Institute published The power of parity: How advancing women’s equality can add $12 trillion to global growth. This report, which focused on the enormous potential associated with narrowing the gender gap, found that if every country did so at the same historical rate as the fastest-improving country in its regional peer group, the world could add $12 trillion to annual gross domestic product in 2025. That’s some 11% higher than it would be under the business as usual scenario.

So what will it actually take to turn this potential into reality? Its new discussion paper, Delive-ring the power of parity: Towards a more gender-equal society, provides an agenda for action and investment, quantifying the progress needed on 15 gender inequality indicators. It finds that while much of the $12 trillion opportunity comes from advancing gender equality in the world of work, we are closely tied to tackling gender gaps in society more broadly. In particular, improved access to services in six areas could unlock economic opportunities for women: education, family planning, maternal health, financial inclusion, digital inclusion, and assistance with unpaid care.

Addressing these areas would require incremental annual expenditures of $1.5 trillion to $2 trillion in 2025, i.e. 20 to 30% more than would ordina-rily be spent given the current trajectories of rising population and GDP. But the results would empower millions of women and men alike, delivering economic benefits that are six to eight times higher than the social spending estimated. It is high time Mauritius realised that empowering the female workforce would lead to a much better success of its economy. Are we ready for the leap of faith?

Himanshu Marchurchand
Rubrique: 
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