Thanks to social responsibility goals related to gender equality across corporate management and board positions, female leadership has emerged as an issue today. Diversity and high female participation in leadership positions have been shown to impact companies’ economic performance positively.
A publication by McKinsey & Company consulting firm1 (March 2018) studied the change in female participation in corporate management positions at the top 50 listed G-20 companies over a span of ten years. Numbers show that progress has been slow; women account for only 12% of executive committee members and only 17% of corporate board positions. There were significant differences between countries. For example, in the United States, both indicators are about 22%.
The same article discusses the findings of another study that concludes that companies in the top quartile for executive-level gender diversity recorded better results in terms of profitability (average EBIT margin) and value creation (average economic profit margin). The analysis considered a five-year period and a sample of 991 companies. While correlation does not prove causation, other research and studies tend to support the link. Just as diversity supports innovation at companies, when there is a problem to be solved, gender diversity also contributes complementary elements. The article calls this concept ‘collective intelligence’.
In the same vein, several studies suggest that women, more frequently than men, exhibit certain leadership traits that are important in facing upcoming global challenges. In a recent quarterly publication (December 2019) 2, McKinsey foresees that the more traditional managerial conduct of control, individualistic decision-making and corrective action are the least critical for achieving future objectives. Intellectual stimulation and efficient communication – which men and women apply in equal measure – and five other leadership traits that women exhibit more frequently are much more critical. Those five traits are inspiration, participative decision-making, setting expectations and rewards, developing people and role modeling. Thus, these leadership behaviors – exhibited more frequently by women than men – improve organizational health and organizational performance, soundly supporting gender equality in corporate management.
According to the McKinsey study entitled “Women Matter: Time to accelerate” (Oct 2017)3 , increasing female participation in corporate management requires a shift in the culture of the company toward an ecosystem that supports women. This is only achieved with commitment from the Chief Executive Officer, creation and monitoring of key indicators, programs for female leadership and policies that make the organization’s hiring and promotion processes gender neutral.
Figures in Chile
In May 2020, the Ministry of Women and Gender Equality, partnered with the Ministry of Finance and the ChileMujeres Foundation to publish the first Report on Gender Indicators at Chilean Companies4, which reflects the working conditions of women at Chilean companies. The report, based on data from 450 companies that reported to the Financial Market Commission (CMF) in 2018 and the input from nearly 900,000 employees, reveals that women hold only 20% of executive committee positions. For board positions, these figures drop to just 10.6%.
The disparity is even more pronounced if we limit the sample to only the top 100 companies in Chile in terms of revenue that report to the CMF or voluntarily disclose this information in their annual report. According to the 2018 IMPULSA5 study (3rd version) by the ChileMujeres Foundation, PwC Chile and LT Pulso, women hold only 13% of executive committee positions. Furthermore, 23 of the 100 companies studied do not have any women in executive committee positions. The 2020 IMPULSA6 study (5th version) looks at gender diversity on the corporate boards of Chile’s top 100 companies in terms of sales reported to CMF. Of a total of 728 directors, only 10% are women, which coincides with the findings of the study of 450 companies mentioned above.
Looking at gender inequality from a more general perspective, the economic participation and opportunities indicator from the World Economic Forum Global Gender Gap Index 20207 places Chile at no. 111 of the 153 countries included in the study. This indicator, which raises global awareness of the challenges behind the gender gap, exhorts us to strive toward equal work opportunities for men and women in Chile. As a talent consulting firm, we are concerned with and committed to this issue. Seeking to contribute to more modern, favorable development at organizations in Chile, our search assignments place emphasis on promoting female talent in a transparent, competitive manner.