Breaking the myth of meritocracy

July 2022 | SPOTLIGHT | BOARDROOM INTELLIGENCE

Financier Worldwide Magazine

July 2022 Issue

Too often, we hear the comment that ‘it takes time’ to build the pipeline of women for leadership; that there just has not been enough women in the pipeline for long enough to move the dial on the ‘face’ of corporate leadership.

Around thirty years ago, university graduates were more than 50 percent women among Organization for Economic Cooperation and Development (OECD) countries. The pipeline of educated, innovative, ambitious and capable female leaders has been present in abundance for decades, and yet that has not translated into boardrooms filled with these women.

The author has the fortune of being surrounded by incredibly accomplished women on a daily basis – women that have successfully climbed the corporate ladder, excelled in public sector roles and built businesses of their own.

Those who lament that there just are not enough women of merit to fill leadership roles in the economy must have a very small network, or cannot see leadership when it presents in a different form than that with which they are accustomed or familiar.

A recent report found that women hold just 19.7 percent of board seats globally, a mere 2.8 percent increase from 2019 despite many initiatives to spur gender diversity on corporate boards. At this pace, the world could expect to reach near-parity in 2045, over 20 years from now. Even more troubling, women hold only 6 percent of board chair roles and 5 percent of chief executive roles, and these numbers have barely moved over the last decade.

Why should we focus on those two roles in particular? The chief executive and chair of the board play the most influential roles in our economy. The strategy and goals for the business, the agenda of the board and the culture of the organisation are largely defined by the individuals who hold those two pivotal roles in an organisation.

Women hold a mere 5 percent of the most influential roles in the economy, yet we have long represented more than half of university graduates, not to mention half of the world’s population.

Volumes of research by credible organisations like Credit Suisse, McKinsey and Catalyst have demonstrated higher levels of gender diversity in leadership result in stronger financial performance.

Diversity in leadership leads to stronger companies and a more competitive economy. Capitalising on 100 percent of the talent pool for leadership should be a top priority for every board and management team. But to fix the meritocracy and ensure that women are just as likely as men to make it to senior leadership roles, companies need to have a plan to get there.

A policy for increasing gender diversity in the boardroom and in the executive suite should be expected of every board by all stakeholders, from shareholders, to employees, to government. More importantly, targets with transparent reporting and links to executive compensation will be critical to moving from platitudes to results.

Christine LaGarde, president of the European Central Bank (ECB), recently commented on the need for leaders who are prepared to adapt to a world of greater complexity and uncertainty – people who can break down knowledge silos, bring together pioneering minds from different sectors and find integrated solutions to complex problems.

She also noted the need for leaders who can build bridges and find common ground where it exists. These are people who create trust, listen to others and can connect with those unlike themselves: characteristics which female leaders tend to possess in abundance, and which can be beneficial in multiple situations – especially in times of crisis.

There is a narrative that women are better at leading in a crisis, yet it seems to assume that their leadership qualities emerge only episodically and then disappear again. The past two years have once again shone a spotlight on women’s strengths as leaders.

A recent multiyear study of leaders and employees from approximately 5000 companies in close to 100 countries looked at how leaders do the hard things that come with top jobs while still remaining good human beings. In essence, it explored leaders ‘doing hard things in a human way’.

Wisdom and compassion emerged as the most potent and effective leadership qualities in difficult times. When the data was parsed by gender, 55 percent of women in the study were ranked by their followers as being wise and compassionate compared to only 27 percent of men. By a 2:1 margin, followers said that women leaders versus male leaders are able to do hard things in a human way.

In a world which is craving leadership in a time of crisis, in an economic period which calls for steady stewardship, all in the face of great environmental and societal challenges, it seems time to acknowledge and make room for new forms of leadership. It is long overdue that we challenge women’s role in the 5 percent club of leadership in our economy.

Jennifer Reynolds is chief executive of the Women Corporate Directors Foundation. She can be contacted by email: jreynolds@womencorporatedirectors.org.

Jennifer Reynolds

Women Corporate Directors Foundation