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Business needs women
Rzeczpospolita:ConsideringPoland’s history, which gavewomen apossibilityto show their talents, as men frequently died in wars or were sent to Siberia, women’s participation in seniorpositions,includingcorporateboards, is small. Why is that so?
Iwona Kozera: Certainly, there are several reasons for this. In my opinion, to a large extent this is due to the natural tendencyof selectingmembers of a given group based on similarity. Men clearly prevail in corporate management and supervisory boards. Consequently, there are fewer women on the boards. Frequently women themselves resign from running for top executive positions in corporations. At the level ofdirectors, e.g. in finance, the proportion of women is substantial. However, as regards managing directors and board members, the majority of them are men. The Women’s Leadership in Business Foundation was established to build the awareness of the advantages arising for businessesfrom women’s presence in the economy, to support partnership in business and to make a better use of women’s management talents to achieve greater economic benefits. We are engaged in specific activities aiming to develop women’s leadership competencies to enable them to aspire to top management and executive positions.
Do women withdraw at the level of directors or even earlier?
Based on my observations, they oftenwithdraw already at the medium management level— managerial or supervisorial. And it is a mistake, as this is the level where the future professional career is decided.
So how to stop women fromgiving up in the race for top positions?
This requires multifaceted efforts. The first aspect is awareness building—explaining why women are needed in management. There are numerous unquestionable research results proving that groups diversified in terms of the participation of men and women are more efficient.Unfortunately,it would be difficult to conduct such a research in Poland, as we have relatively a few public companies and, additionally, there are few women on their management and supervisory boards.However, analyses of corporations listed on global stock exchanges show that the mid-term firms with diverse management boards achieve better results than others. The research conducted by Peterson Institute with EY’s support shows that a 30% proportion of women in corporate authorities results in an up to 6% rise in net profitability. As shown by the MIT and Carnegie Mellon research called“Navigating disruption without gender diversity? Think again", diversified teams achieve better results in logical analysis, coordination, planning and problem solving.
These arguments are worth considering.
There are already some funds which are investing only in corporations with diversified managements in terms of women’s participation in corporate boards. Furthermore, in the current extremely competitive market, where companies are struggling for good candidates, they begin to seekmethodsto increase people’sinvolvementand creativeness. And in teams diversified in terms of gender, age or mentality, talent development, involvement and creativeness are improved. This is where women’s communication skills and their seeking of consensus comes in handy.Therefore,companiesshouldbeconstantlyremindedthat women entering the boardroom bring specific advantages and improve business performance measured by specificindicators.
What else needs to be done apart from building social awareness?
The second aspect refers to what can be done by the state, various institutions and organisations,such as e.g.The Polish Association of Listed Companies.If the need foragreater participation of women to improve companies’ profitability, etc., is stressed on the capital markets, and in associations of stakeholders, then a real change will happen. The widely defined authorities also have a significant role to play by building awareness of the advantages arising from women’s greaterparticipationin the economy, or by providing good childcare to make it easier for women topursue professional career.
It can be argued that the state and the institutions are already doing something: the number of nurseries and kindergartens is growing, we have had the WSE Code of Best Practice for years, and for a year we have had the EU Directive on the disclosure of non-financial information, which contains regulations that are meant to encourage public companies to increase women’s participationonmanagementboards.How do youe valuate them?
It’s a good direction, but there is also a question of how these regulations are implemented. The directive has introduced the ‘comply or explain’ formula, which helps to discern the problem, but I don’t know if this would help to promptly solve it. Such regulations are important, but in a longer perspective. Meantime,thebusiness environment changes rapidly and I believe that organisations seriously thinking of increasing women’s participation in business will significantly improve their market competitiveness.
Are we, therefore, left with mandatory quotas for women on the boards of large corporations, asthey have beenalready introducedinsomeEuropeancountries?
If we do not treat all the above-mentioned actions seriously enough to bring about a real change, then we will be left with the quotasonly. However, for the time being we should strive to drive the change by showing the advantages from women’s greater participation in corporate boards rather than by imposing the quotas. The question is, however, whether these actions will bring any effects within a predictable time horizon. There is also the third areaof activities,which isthebusinessitself. Firstly,it is necessary to convince people at the very top of organisations, i.e. on the supervisory and management boards, that it is worthwhile to increase women’s participation on corporate boards. This must, however, be followed by specific actions.
Which are the most effectiveactions?
There is a need for collaboration between women and men. The problem of insufficient participation of women in management is not just women’s problem—it is the first of all business dilemmas. For example,many mendoengage in the activities of our foundation,and I’m very happy about. As for firms, a number of them have already set internal targets for women’s participation in executive positions, e.g.within a five-year horizon. This is followed by solutions which help to prevent their attrition at lower positions, including talent management programmes.Leadership development programmes are also helpful,as women tend to have a lower self-esteem.Generally,they are less willing to apply for top positions in internal competitions, even if they have very good and adequate competencies. Therefore, they must be encouraged to participate in such competitions. Usually it is enough to make them aware that they can do it. The so-called role modelsare extremely important—women whose careers can serve as an example and inspiration for others. Mentoring programmes, which work out very well not only in the case of women, are also very effective. For example, the Women’s Leadershipin BusinessFoundation runs a cross-company mentoring programme lasting nine months and combining persons from various companies. In this programme, the mentee is assumed to get assistance in achieving a specific target, e.g. a promotion into a management board, change of the area of his/her operations, or development of specific competencies. Our programme has now been running for five years and about 500 persons participated,not only women.
With what effect?
Mentees’ goals are diversified, but our research shows that over 80% of them are achieved. The follow-up of the programme is also important: we run the Mentee and Mentor Clubs, which provide a platform for further collaboration and exchange of opinions and experiences. The same can be done incompanies. However, I do believe thatgoodresults can be achieved bysetting achievable targets. Thisrequiresbeingspecific, for exampledetermininghow many women are needed and in which positions to create an adequate pool of persons that are ready to and interested in being promoted into the management board. I do not believe in the target set by some companies to have at least one woman on the management board, as veryoften they end up withonlythat woman. I think such a target can even be harmful.
Thecompanymay think that the target has been achieved by appointing one womaninto the management board, whereas a single woman on a 5-7-personboard may have no significant impact on the way of thinking of the whole group. Some statistics say that only a group representing 30% of a given population may have a genuine impact on the way it operates. That is why the target should be at least 30% or higherwomen’s participationon the board. I also stronglyrecommend replicating what we do at EY—i.e.payingattention to how women and men are evaluated during periodical assessments. Statistically there should be no major differences in the distribution of grades, hence there should be no large discrepancies in women’s participation in promotions relative to their proportionin the whole population.
Another issue that we should pay attention to is an equal remuneration for the same work. Researches show that in Poland we don't have problem with this at the lowest levels, but at the executiveonethe differences exceed 27%.
If research confirms the advantages from women’s participation on the boards, and in addition women agree to be paid lower salaries, then why don't companies appoint them in massive numbersinto the boards?
An important reason is the lack of awareness. Five years ago, when our foundation was starting to operate, we did not even mention these research results,because we thought they were widely known.
It proved, however, that even personson the boards know little of them or nothing at all. We are often asked to provide data. Sometimes we are also told that there is no proven correlation between the proportion of womenon the boards and corporate performance.So, there is a need to explain that such correlationsdo existand in a number of groups:not only inexecutiveteams,but also, for example, in project teams—which we can see at EY. In certain areas we carry out very similar projects,and a few years ago we examinedefficiencyof teams that were all-male, all-female and mixed. We found out that the efficiency of mixed teams was 6-10% higher than that of the others. Therefore, we must keep on reminding about the advantages of diversity—and not only in terms of gender—as theageissue is also gaining on importance.
Iwona Kozera has been engaged for over 25 years in business advisory for the financial and public sectors in Central and SoutheastEurope. Shehasworked for, among others, thelargest financial and public sector institutions. She is a graduate of the Warsaw University of Technology and completed the Harvard and Kellogg management programmes.
This is a translation of an interview published in the Polish daily newspaper "Rzeczpospolita". The original interview can be found here.
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