Note: The focus of this article on gender-diverse management is on women. Still, our more overarching stance on the issue is that all gender identifications (man, woman, non-binary, etc.) deserve fair and unbiased opportunities to become leaders.
Even though women make up around 40% of the formal workforce worldwide, they are still underrepresented in leadership positions in 2021. Structural, institutional, and cultural barriers impede women from seeking and obtaining the highest-ranking jobs across all sectors. In this article are some of the reasons it makes sense - also financially - to put gender diversity on the agenda.
Gender-diverse businesses have better outcomes
Only a third of full-time employees in the private sector are women, which obviously means that the recruitment base for management positions is very narrow. - Mette Fjord Sørensen, Deputy Director at Danish Industry
Women in the workforce always seem to be in the news. In the 2021 case of Blizzard, it was for sexual harassment. In the 2020 case of Pinterest, it was for marginalizing and excluding women from decision-making processes. Both issues are not the most encouraging for women in the corporate world. So why is this still happening? For Blizzard, the gaming industry has a reputation for a notoriously toxic culture, and for Pinterest, women in tech seem to face a unique set of challenges.
But in other news...
Research by McKinsey found that companies with gender-diverse corporate leadership outperform less diverse peers financially. In fact, the greater the representation of female leaders, the higher the likelihood of outperformance. The most gender-diverse companies (more than 30% female) are a staggering 48% more likely to outperform those with fewer than 10% female executives.
Gender-diverse companies benefit from diminished groupthink, a phenomenon where a group of similar people will tend to gravitate towards the same decisions, opinions, and reasoning. A diverse management team can ensure a healthy degree of competing thoughts and ideas to produce the best possible outcomes.
In the political sphere, statistics by UN Women reveal that women are underrepresented. If the development continues at the current rate, we will not achieve gender equality in the highest positions of power for another 130 years.
We need to engage more male leaders in the diversity debate if we want to see changes. We need actions and concrete goals - not just good intentions - Charlotte Holm Billund, chief consultant at The Danish ICT Industry Association.
So studies in both corporate and political spheres are (and have been for years) making a clear case for introducing more women to the corporate management sphere. And companies must be following suit, right?
There is a significant disconnect between what the studies recommend and what is observed in the business sphere. In fact, according to a global study by McKinsey, gender diversity in leadership teams has progressed slowly from 2017-2020, with just 1%.
What women bring to leadership positions
"It is time to realize that diversity is a strength and take action. The brave ones get a competitive edge over their peers, more innovation, and better financial results." Joo Runge, co-founder InTech Founders & board member of Women in Tech Denmark
So if we look at the data and think about the meaning of gender diversity, we aren't really hitting the mark, are we? And businesses are missing out. The argument being made here isn't just for the sake of fairness, democracy, diversity, and equality - although those arguments alone should be enough - and companies shouldn't embrace gender diversity because it "looks good". Women (too) bring a variety of skills, perspectives, and traits that drive effective solutions.
Don't you want the skills, perspectives, and qualities of 50% of the world's talent equally represented in your organization?
Psychologist and researcher Ruth Aharoni Nielsen explains that "both men and women pay the price for living up to traditional gender roles. This is why, when we talk about diversity in management, it is not about "giving women an opportunity". It's about collaborating on creating organizational and societal cultures in which men and women have equal opportunities to be leaders and caregivers. It's about what kind of organizations, societies, and family structures we would like our sons and daughters to live in. Even though numerous studies show that diversity has an edge in the business world, choosing diversity is, first of all, a moral choice."
Organizations with an overweight of men need more women to ensure a more nuanced perspective on everything from market analysis to finance, ethics, consumer behavior, culture, sales, and leadership. In the same way, companies that mainly employ women will benefit from the appointment of more men. We need equality of all genders to ensure the best combination of skills and traits.
Female leadership during the pandemic
From early on in the pandemic, the gender of political leaders has been discussed in the media. According to numerous articles (see, e.g., NY Times, The Guardian, and Forbes), the success of female leaders' handling of the pandemic has been accredited to traits historically associated with the feminine; Collectivism, community, trust, and compassion.
Notable female leaders such as Angela Merkel (DE), Tsai Ing-wen (TWAN), Jacinda Ardern (NZ), and our own Mette Frederiksen (DK) were quick to act despite possible economic consequences. They used collectivistic rhetoric, emphasizing interdependence, solidarity, and the protection of the community.
In contrast, Donald Trump (US), Jair Bolsonaro (BR), and Viktor Orbán (HU) tended to utilize language associated with fear and military jargon (e.g., 'at war' and 'under attack'). Furthermore, they have been accused of using the crisis to gain more power and create more polarization instead of more unification.
According to a comparative analysis of female and male-led countries of similar socio-demographic and economic characteristics, the former did indeed seem to navigate the pandemic with fewer deaths and cases. The researchers credit this success to a greater willingness to take financial risks and a more democratic and participative leadership style.
So, does that mean women make better leaders?
No, not necessarily. It means that certain leadership styles are more appropriate for different situations and that our socially constructed idea of what is "male" and what is "female" gets intertwined in the evaluation of leaders.
One thing is certain; including more women in top political positions ensures that we do not overlook 50% of our population and the talent they possess. Moreover, if emphatic, community-oriented, and participatory leadership styles prove to be the most effective and sustainable, why accredit them to women only? Justin Trudeau, Prime Minister of Canada, has been accredited with having a "female" approach to handling the pandemic, but why do we have to attribute it to gender?
Men and women are not so different
Many people are under the deeply rooted assumption that there are fundamental differences between the genders and their leadership abilities. However, the idea that women are more collaborative, caring, and emphatic is not supported by science. When it comes to skills, inclinations, and attitudes, women and men are not that different.
Gender mainstreaming is an important part of the work to protect and promote human rights. When it comes to representation in Danish company boards we are still alarmingly lacking behind with more than 80% of board members being male ( 2.225 largest Danish company boards In 2020). This need for improvement has also been pointed at by the UN Women Committee. - Mette Boye, vice-chairman, board of Danish Institute of Human Rights
What does, however, differ are the circumstances that men and women face.
Generations of structural (e.g., maternity leave and domestic tasks), organizational (e.g., exclusion from social events or clubs and the lack of mentors), and cultural (e.g., socially constructed gender stereotypes) barriers hinder women from seeking and obtaining management positions.
In a nutshell, "context explains any sex differences that exist in the workplace" - Harvard Business Review, 2018.
If we look at the example of maternity leave, women are often expected to take the majority, if not all, of the time off with their newborn. The underlying structural expectation for women is that they put their family first and that they, as a result, will become less ambitious at work after having children. On the other hand, the expectation for men is that they power through the fatigue and stress that come with expanding the family and only take little time off work. Men are therefore less inclined to take on more maternity leave because of expectations associated with their gender.
Initiatives such as distributing child allowance money to both parents (encouraging men to participate more in domestic chores) and maternity leave earmarked for the father can make it easier for men to step into new roles in their family lives. It can also alleviate some of the burdens placed on women, creating more equal opportunities for both.
Changing the structural settings around gender roles in the workplace instead of reinforcing gender stereotypes (well-meaning or not) that keep women in lower-level positions can ensure more equality.
It starts early
The consequence of these structural, organizational and cultural barriers for women can be seen early in their lives. The lack of role models, the different expectations from society, and gender stereotypes learned from a young age mean that both men and women tend to underestimate women's abilities.
This tendency has been traced back to the school bench, where women's perceptions of their academic abilities tend to be underestimated and mediates their perceived professional skills. The disconnect between perceived and actual abilities means that women are less pushy and more inclined to underrate themselves when reviewed for a leadership position.
Structural conditions and organizational cultures within specific sectors mean that these consequences are more extreme for women in STEM, tech, and female entrepreneurs. For instance, women-led startups receive a much smaller proportion of funding compared to male-led. It is estimated that around 20% of scalable Danish startups have female founders. However, only 1% of Danish venture capital investment goes to women-led startups.
As a female entrepreneur, you are met by a system that is designed based on the stereotypical man. There are very few role models to look up to, and you are viewed differently as a woman. - Line Groes, Founder & CEO at Hera&Me
When women-led startups do receive funding, they are more likely to succeed compared to male-led. One explanation could be that the strong push-back from investors means that only the very best women-led pitch ideas make it through. Another reason could be that women-led startups with a balanced gender distribution have different perspectives and life-worlds and avoid groupthink, which equips them to be more successful.
A study revealed that women receive different questions than men when they are pitching to investors - questions about risks, whereas men receive questions about potential. To add to the complexity is our Silicon Valley glorification of chasing "Unicorns", which is a narrow and masculine approach to entrepreneurship - Line Groes, Founder & CEO at Hera&Me.
These proportions of men and women matter because they shape the future in more than one way. Companies, industries, educational institutions, and study directions with a somewhat equal gender proportion ensure that competing approaches, thoughts, and ideas are present. In turn, an equal gender proportion will ensure that both men and women feel a high degree of psychological safety (showing their true self) within their profession or education, which is a predictor of success.
In addition to differences in perceived abilities, public distrust in female leaders, legislative policies such as maternity leave, conscious or unconscious gender biases, and younger people's erroneous belief that women are well-represented in politics and business contribute to the issue of low gender diversity in management.
So how do we fix it?
Complex problems require complex solutions
As there are an intertwined and complex set of factors that contribute to women not seeking, or not getting, leadership positions, there is no silver bullet. At the current rate, it is estimated that gender equality in top-level positions will not be reached in 130 years.
Simone Salung, Author & lecturer at Copenhagen Business School, explains that her "experience as a woman working in large organizations is that there is a glass ceiling. This means that women have to be much more insistent on gaining the required competencies and network to succeed in a career that is focused on making it to the top.
The closer we get to reaching high-ranking positions, the more competition, and the competitors use any means necessary. This includes men who condescendingly insinuate that women, with their shrill voices, are only there for entertainment and for their long legs and good looks.
The new black when promoting or hiring for leadership positions is to focus on who can solve the company's core tasks. And in this space, where employee robustness, loyalty, responsibility, competencies and flexible work hours are in focus, there is a good opportunity for men and women to be equal competitors."
Organizations have a responsibility to look critically at their culture and structural circumstances (such as social events excluding women) in order to create a favorable environment for people of all genders.
It is time to realize that gender differences are not biological, they are learned, created, and recreated through culture and institutions, and even the praise of certain, successful management styles as being "feminine" is a part of the issue.
Here are our recommendations for how your company can start fostering a culture where more women become leaders:
1. Sustainable dialogue
Regular dialogues between manager and employee ensure that aspirations to occupy leadership positions are heard and encouraged. Needs and pains can easily go unheard if meaningful conversations between management and staff are not incorporated into the company's basic foundation.
During a dialogue, challenges with inclusion, work environment, and perceived or actual barriers for advancing the career ladder can be uncovered. Take this opportunity to set solutions into play, such as training or mentoring.
And why not start at the very beginning of your employee's career? Gender diversity as a core part of the recruitment process can ensure that you attract and retain female talent.
Implement diversity and inclusion in your recruiting process and make an updated strategy for how to attract, recruit and maintain female talents. - Alice Déchamps, marketing manager at Goodtalks
2. Think corporate culture
Employees absorb the corporate culture of their company, and management is a determining factor in this culture. How managers act, what they communicate and do not communicate to their employees sets the tone, for better or worse. Some corporate cultures, such as the tech industry, have a complex structure that seems to be geared in favor of men, and tech companies need to work actively to go against that development.
Tech companies can easily become boys clubs if you aren't careful. We don't have a totally even gender balance at Contractbook, but we have taken an active decision to diversify. Because we believe that it's the right thing to do, and frankly, because being able to bring in multiple perspectives gives us tremendous value. We are trying to be strategic about it in our recruitment process and our business culture - and the good thing is that it gets easier with time. - Kristine Stær, Director of Marketing at Contractbook
Research suggests that one aspect of corporate culture which predicts more women in leadership positions is psychological safety. Psychological safety is achieved in an environment where employees feel safe and comfortable being themselves without fearing negative outcomes. In a culture of high psychological safety, people ask questions, speak up, challenge the status quo, and are true to themselves.
When there are no women in the management sphere of a company, women tend to have lower psychological safety and are therefore less inclined to engage in interpersonal risk-taking - which is an essential factor in becoming a leader.
Psychologist & researcher Ruth Aharoni Nielsen explains that "from a psychological perspective, "psychological safety" in organizations is not only the best predictor for high performing teams but also the best predictor for having women in top leadership positions. A culture of psychological safety makes it easier for people to fully bring their true identity into the workplace without fear of paying the price for being who they are. This makes it more comfortable to collaborate, seek help, admit making mistakes and innovate. Thus it is easier for women to pursue top leadership positions in traditionally all-male organizations that promote emotional safety."
3. Rethink the work-setting
One of the issues women are facing is that they often take on more of the domestic workload than their partner. As a result, they have to scale back their professional aspirations and say no to opportunities due to limited time.
Psychologist & researcher Ruth Aharoni Nielsen explains that "research suggests that the strongest demographic characteristic that predicts being a CEO is whether you have a stay-at-home spouse. If we want to see more women in CEO positions, we either need more men to stay at home, or we need to create workplaces that are friendly for double-income couples, in which both partners can have a fulfilling career and participate actively in childcare."
To combat this issue, rethink aspects of the work setting. Allow for flexibility in the workweek by using technologies such as Zoom and Slack. Allowing an employee to work from home when their child is sick or when they have an important household delivery can help their work-life balance.
Invest in support programs for women (or men) who need childcare, cleaning services, elder care, etc. This can ensure that career aspirations can be pursued without sacrificing the domestic sphere - by both parties.
4. Create a network of support
People find strength in others and the courage to speak up when they recognize that their views are mirrored. Create support networks or mentors in your company to ensure that women who aspire to become leaders have inspiring role models.
Promote and reward role models in the management team who practice diversity and inclusion in their team - IDA, on how to tackle the gender-diversity issue
There are a range of different support networks for female leaders here in Denmark, where women, with aspirations to move up the career ladder can find resources, role models, sparring, and inspiration (e.g., IDA and Woman)
5. Set ambitious goals
Sometimes we need to force the development in the direction that we want it to go. If male-dominated leadership spheres impede women from seeking and getting leadership positions, a gender quote can help solve the issue.
With DI's Gender Diversity Pledge and its ambitious goal of a 40/60 gender distribution in the top management levels by 2030, the business community will jointly pave the way for a more diverse labor market and society. We will simply become a better and richer country if more women unfold their talent in the private sector - and if more women reach the top levels here as well. - Mette Fjord Sørensen, Deputy Director at Danish Industry
The Confederation of Danish Industry has recently created a new initiative called the Gender Diversity Pledge. The organization encourages companies to live up to 16 principles that aim to promote gender equality and representation. The goal is to achieve a 40/60 gender distribution in leadership and board positions by 2030 within the Danish business community.
Did we forget something?
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