Gender diversity role in leadership

Last week I attended the launch of the ‘Women Matter Africa’ report by McKinsey. Launched in 2007, the Women Matter reports study the links between companies’ share of women in leadership positions and the respective financial and organisational performance.

Now, a sentiment was expressed severally at this launch which a lot of women would agree with. That we are still, in the 21st Century, trying to convince not just Africa but the world that leaving out half the planet’s inhabitants in governance is a bad idea, feels like an interminable conversation.

And yet here we are, with studies showing that in the private sector globally, women hold only 20 per cent of the executive committee, 4 per cent of CEO positions and 13 per cent of board seats.

The research on this report shows that organisations with more women on their boards tend to have higher metrics along operating margins, return on equity and a total return to shareholders. This has also been demonstrated empirically by, among others, the Harvard Business Review and the World Economic forum in advocating for diversity and equality in economic participation.

It is important to mention though that in the larger context, diversity is not just about gender but encompasses race and differently abled people. In the same way, the gender conversation would apply if the equation were changed with more male representation being called for in overwhelmingly female dominated scenarios though this is rarely the case.

As a second disclaimer, a correlation between the proportion of women in senior positions and financial performance does not necessarily imply causation, meaning that just having women in these spaces will not guarantee financial success. Key is the recognition that, on average, male and female attitudes towards risk and decision making differ significantly, which in turn creates space for more enriched deliberations.

However, even as we have these conversations and show the linkages, the report cites that despite the strong case for gender diversity in leadership, only 31 per cent of African companies see it as a top strategic priority for the top leadership and 25 percent state that it is of no importance to the firms.

That when as women we tackle the gender gaps in leadership it is not seen as a non-issue and that many men cannot identify with these struggles is in some part rooted in the cultural fabric of our society.

This is one of the main reasons why reports such as these are relevant, as they address the biases we have so mired on our day-to-day living that we take the status quo as standard.

But the conversation needs to go beyond organisations.
First, the conversation regarding women’s inclusion and participation in leadership, whether in the private or public realm, is not a women-only agenda.

And furthering this initiative is not one that can be single-handedly tackled by women. In fact, it is more detrimental for women to try and advocate for why they need the opportunity to wield stronger influence in whichever sphere we are focusing on.

Being able to show the positive link between, say, an organisation’s financial performance and diversity from a decision-making perspective from data and surveys is the initial step in exhibiting value and bringing the conversation into the public space.

Why then, if several reports are able to link healthier financial performance to gender diversity, are there still so many organisations for which female leadership participation is not a priority? In more cases than I am comfortable with, discussions around women having a seat at the table, as we colloquially refer to it, often degenerate into being branded as advancing a feminist agenda. And while I have nothing against feminism, the salient points of these deliberations get lost as soon as participants take opposing emotional stances against each other.

One important aspect of the private sector that is continually being explored is around organisations in the SME space. The sentiment I have heard severally is that when evaluating leadership, a key dynamic regarding how many women are setting up and running their own businesses is often overlooked in favour of the larger corporates and organisations that end up in the limelight for one reason or another.

According to the last comprehensive paper that I could find on women owned businesses in Kenya by the IFC and the World Bank, these account for 48 per cent of all Micro and SMEs, contributing to around 20 per cent of Kenya’s GDP.

However, women-owned MSMEs report earning only 57 per cent of the income that male business owners earn, they have fewer employees, are smaller and on average less likely to grow.

When these businesses remain as cottage industries, they are similarly unlikely to provide the data that allows for evaluation and therefore skewing the perception of how many women are participating in leadership, especially in the informal sector.

Either way, I am hoping that the debate that began a week ago is going to gather momentum, whether in the private, MSME or public space. While Africa has made bigger than average strides, there is still a lot to do regarding gender diversity.