Having once been a world leader in the number of women in senior management roles in business, New Zealand is now dropping back to the pack, according to the latest research from Grant Thornton.
The figures from Grant Thornton’s International Business Report (IBR) reveal that women hold 28% of senior management positions in businesses in New Zealand, down from 32% in 2011 and still behind the 2004 level of 31%.
New Zealand’s drop is also reflected in the Asia Pacific economies (25% in 2009 down to 19% in 2012), South East Asia (36% in 2009 down to 32% in 2012) and the BRIC economies (30% in 2009 down to 26% in 2012).
Europe bucked the trend. Despite rising unemployment, the proportion of women in senior management in Europe has continued to rise steadily from 17% in 2004 to 20% in 2009 to 24% in 2012.
Pam Newlove, National Director, Privately Held Business for Grant Thornton New Zealand Ltd, said that New Zealand once applauded itself for having senior roles such as Prime Minister, Governor General, Chief Justice, Securities Commission Chairperson and many others, held by women.
“Perhaps we rested too much on our laurels and didn’t realise work was still required to bring the next generation of female leaders through?
“The key is senior management developing and endorsing corporate cultures whereby hurdles are not put in place preventing women from aspiring to, and retaining, senior roles. These hurdles include being unwilling to embrace flexible work practices or a corporate culture that places excessive workloads on senior management that make balancing such a role with family commitments untenable,” she says.
“I have witnessed many women operate far more effectively than their male counterparts in these senior roles. They tend to come to work very focussed on what they want to achieve in a fixed time period and will clearly and logically think through what is needed to achieve an organisation’s goals. Their experiences in multi-tasking on the home-front tend to make them highly organised on the work front.
“Women make over 50% of the purchasing decisions in most households in New Zealand so why would a company not have them influencing their own strategy? Can organisations afford not to have them on board the senior management team?” she said.
Newlove wondered what organisations are doing to encourage female talent at the middle management level to progress through to senior roles?
“Women who have achieved senior roles have a social responsibility to support others to do the same but also to remind colleagues in senior management and boards of directors what their organisations need to be doing to develop and maintain supportive environments to nurture the talents of these aspiring leaders.
“While many may consider New Zealand’s ranking in these results as pretty good compared with other economies including our Australian neighbours (24% of senior positions are held by women), we need to ask ourselves whether the downward slide is a trend we want to see continue or whether it is time for business leaders to stop and do something about it, and what might the cost be to an organisation long term in not doing anything?
“If people believe women reach these roles by accident they are sadly mistaken, she said. What I would not want to see introduced is a quota system as is the case in other parts of the world. This would not be beneficial in the long run and I don’t believe capable qualified candidates (male or female) want to see a quota system imposed. Women should only be appointed to senior roles because they are the best person for the role.”
Flexible working hours – New Zealand ranked fourth in the world
When it comes to offering flexible working hours, New Zealand is amongst the world’s best at 81%, headed only by Finland (89%), Sweden (85%) and Denmark (82%).
“Employers need to be congratulated for this as it does put more pressure on a business to provide this option. It requires other senior colleagues to be highly organised and supportive,” she said.
Global comment on female employment trends
April Mackenzie, global head - governance and public policy at Grant Thornton International, said: “Across Europe, getting more women into senior management positions has been high on the political agenda for quite some time. Governments have been vocal about addressing the imbalance and as a result businesses have been under real scrutiny. This encouraging rise in senior women shows the effect this attention is starting to have.
“The steady drop-off we are seeing in the emerging markets is a real concern though. The worry is that we may be reaching the point where women are underrepresented in senior management the world over.”
There are a myriad of cultural, economic and social barriers, which prevent women from reaching the top jobs, but rapid urbanisation, which has accompanied rapid economic growth in emerging markets, could help explain why the proportion of women in senior management is falling away.
Since 1978, China has experienced the largest internal migration in human history, with nearly 160m people moving from the countryside into cities. The proportion of people living in urban areas passed 50% in 2011, and is projected to hit 55% by 2020. Similarly in Mexico, the proportion of the population living in urban areas is projected to rise from 74% in 2000 to 80% by 2020. This is putting a huge strain on traditional family models.
April Mackenzie explained: “The movement into cities has begun to break down traditional models of extended families. The in-built childcare infrastructure, which allowed children to be raised by grandparents, enabled women to work full-time. This is being replaced by ‘Western-style’ nuclear families, which rely on one parent looking after the children or the prospect of expensive childcare.
“Urbanisation presents more opportunities for more people, including women, in many different ways. But the challenges it places on the family model appear to be having a disproportionately large effect on the ability of women to break the glass ceiling and occupy senior management roles.
“Governments and business leaders in emerging markets need to start working now to address this decline. The last thing we want to see is a race to mediocrity where the proportion of women in senior roles in these countries bottoms out and stagnates for a number of years. Or indeed that these high growth economies lose talent because women in the burgeoning rising middle classes opt out of the workforce altogether.
“There needs to be a public discussion now about the policies and practices that will enable and encourage women to continue to progress in the workplace.”
The IBR suggests that offering flexible working conditions could help reverse this trend in emerging markets. Nearly two thirds of businesses in the EU (65%), where the proportion of women in senior management roles is increasing, currently offer flexible working. This is well ahead of Latin America (49%), the BRIC economies (36%) and Asia Pacific (32%).
April Mackenzie said: “Businesses in the emerging economies are lagging behind on the flexible working front. Greater adoption of this might allow a greater proportion of women to make senior positions in the future, reversing the current decline.”
Biggest winners and losers
Of the 40 economies surveyed, businesses in Russia employ the most women in senior management (46%), ahead of Botswana, Thailand and the Philippines (all 39%), whilst Italy ranks highest in Europe (36%).
Bottom of the table is Japan, where only 5% of senior management positions are filled by women, below Germany (13%), India (14%) and Denmark (15%).
The biggest risers over the past 12 months include Turkey (25% to 31%), and the United Arab Emirates (8% to 15%), results that suggest that the wave of economic liberalisation in the Middle East as a result of the Arab Spring could have boosted the chances of women in the region reaching the top.