By Manjari Das
The underrepresentation of women on corporate boards remains a persistent issue, with progress proving as difficult as moving the needle on a stubborn gauge. Despite increased awareness and initiatives promoting diversity, women don’t wield substantial influence in decision-making processes.
Deloitte’s latest ‘Women in the Boardroom’ report revealed that women occupy less than a quarter (23.3%) of board seats in companies worldwide. While it marks a gain of 3.6 percentage points over the report’s last edition, issued in 2022, it shows that parity is a long way off. It is highly doubtful, the report notes, that gender parity will be accomplished before 2038.
Even though women make up half of the workforce worldwide, they only hold a tiny portion of leadership roles. The boardroom, in particular, continues to be a male-dominated area. This absence of gender diversity at the top has far-reaching repercussions. This inequality often hinders innovation and propagates structural injustices.
No One Factor To Blame
How can this be happening? The causes are complex, involving a variety of factors, including implicit prejudices (unconscious bias), entrenched networks, lack of opportunities, and structural barriers. Long-standing stereotypes and biases frequently influence decisions, consciously and unconsciously favouring male candidates. Board members often prefer to recruit from their networks, demonstrating ‘network homophily’. There is a need for more qualified female candidates, as there are fewer women in senior leadership positions. Additionally, women often encounter structural career obstacles, such as unequal access to opportunities and mentorship.
Solutions? The following strategies, which incorporate both the macro and micro approaches, are needed to tackle this problem. Businesses must establish effective mentorship and sponsorship programmes to help women advance to senior leadership positions, increasing the pool of potential board candidates. Broadening includes considering candidates from non-traditional backgrounds, such as academia, non-profits, or government, and not just those with CEO or CFO experience.
A cultural shift within organisations is necessary. Companies must create environments where diversity is valued, and inclusion is ingrained in the corporate ethos. This includes addressing broader workplace-culture issues, such as gender pay gaps, work-life balance, and harassment. Cultural change is the engine behind the gauge, driving sustainable movement towards diversity.
Change will not occur overnight. It requires sustained effort and long-term commitment. Governments and regulatory bodies can also be crucial in accelerating progress. Enforcing quotas for female board representation, as some countries have done, can be a powerful tool. Additionally, investing in early childhood education and care can help alleviate the burden of caregiving on women.
Authorities should pressure companies to report on diversity metrics transparently and hold themselves accountable. Regular public disclosure of gender diversity statistics on boards and in senior leadership can pressure companies to improve. Transparency is a bright light on the gauge, illuminating areas needing adjustment.
It is important to adopt a new paradigm to achieve gender balance in leadership. Companies should invest in educating their boards and executives about the benefits of diversity and the biases that hinder it. There must be a discussion about the understanding that diversity is not only the right thing to do, but also the smart thing for business. The time has come for the verbal appeals to cease, and efforts to be made to create the right conditions for women’s participation in business.
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Despite continued difficulties, there are signs of improvement. More organisations are realising the importance of gender diversity, and some companies have started taking measures to address this issue. For example, shareholders can demand greater board diversity by using their voting power to support diverse candidates and engaging with companies on diversity policies. This implies that corporations will feel compelled to prioritise gender equality because of this mounting pressure.
By implementing these proposed solutions and addressing the root causes, we can gradually shift the balance and foster more diversity and influence within corporate boards. Achieving gender equity in leadership roles is undoubtedly challenging, but it is possible with dedicated efforts. The advantages of embracing diversity are far-reaching and can contribute to a company’s success, extending beyond financial performance to encompass ethical considerations. Diversity doesn’t just foster fairness and equality; it also enriches decision-making processes and positively impacts overall company performance.
The writer is Associate Vice-President at WD Partners (I) Pvt Ltd.
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