Professional Documents
Culture Documents
Risk
Women Leadership
in business
New perspectives on risk and reward
March 2017
“Many of today’s
companies are still
run by male-only teams
and they are in danger
of myopia when it
comes to risk.”
Francesca Lagerberg
Global leader for tax services
and sponsor of women in leadership
Grant Thornton
Contents
Executive summary 6
Diversity in leadership 8
Recommendations 20
But businesses should do more than However, despite evidence that links The reasons for this lack of diversity are
react to the challenges of our time. As diversity and improved business many and varied, and they depend on
they respond to concrete realities, they performance, the dial on gender diversity the culture of individual businesses
must also consider opportunities that in senior leadership is shifting at a and the broader culture in which they sit.
promote long-term growth. The need to painfully slow rate. Worryingly, this year we have detected
grasp these chances has arguably a sense that the issue of gender diversity
Research from the Grant Thornton
never been greater. is beginning to lose its bite.
International Business Report reveals
We have surveyed the role of women in that, globally, the percentage of women We simply cannot let this happen while
business for the last 13 years and, in this in senior management teams has risen progress is still marginal. Companies
year’s report, we look at the issue of risk just one percent in the last year – from today need to be more productive, more
and reward. We find that men and women 24% in 2016 to 25% in 2017. This innovative and in many ways more open
see risk and opportunity in different ways, contributes to a six percent shift in the if they are to thrive.
and that they act differently as a result. 13 years since our research began.
It is why in this year’s report we provide
Recognise, celebrate and seize upon Unfortunately, at the same time, the
a number of recommendations on how
these differences, and companies stand number of organisations with no female
to increase the number of women in
a better chance of seeing the world as it participation at a senior level has risen
senior leadership positions for the
really is and as it could become. Fail to from 33% in 2016 to 34% in 2017. This
benefit of businesses as a whole, and
create diverse teams, and companies is a serious weakness.
risk strategies in particular. Businesses
become susceptible to ‘groupthink’ – the
Companies today need to must heed these lessons: many of today’s
phenomenon where by engaging only
companies are still run by male-only
with those who share a similar view of the be more productive, more teams and they are in danger of myopia
world, we muffle other perspectives and innovative and in many ways when it comes to risk. As one of our
do not see change coming.
more open if they are to thrive. contributors said: “The real risk to
business is not getting women involved.”
Francesca Lagerberg
Global leader for tax services
and sponsor of women in leadership
Grant Thornton
of senior roles
held by women
24%
33%
25%
Proportion of
senior roles held
by women
of senior roles
held by women of businesses 2
24% have no
women in of s
man
34%
senior
management are w
33% Percentage of
businesses with no
women in senior
leadership1
of businesses Source: Grant Thornton IBR 2016 20%
have no
women in of senior of
senior
management 1:15
managers
are women
20
of se
man
are w
6 Women in business
1:15
Figure 1: Proportion of women in senior leadership
30%
25%
20%
15%
10%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Grant Thornton IBR 2016
1
Senior leadership refers to chief executive officers, managing directors, chairmen and other senior decision-makers
2
Women in business: The value of diversity – Grant Thornton (2015) 3 Women as a Valuable Asset – McKinsey & Company (2012)
8 Women in business
Figure 2: Proportion of senior management roles held by women
2016 2017
27% 29% 26% 29% 13% 13% 34% 36% 26% 29% 24% 26% 24% 26% 22% 22% 18% 20% 23% 23% 24% 28% 28% 27%
Africa Emerging Developed ASEAN BRIC EU Eurozone G7 Latin North MINT Southern
APAC APAC America America Europe
Source: Grant Thornton IBR 2016
Pamela Harless, chief people and culture for smaller start-ups or setting up on This is exacerbated by another caricature
officer at Grant Thornton US, believes the their own. Choice is good but larger of a leader who, according to Pamela
issue has lost some of its heart. “There’s firms cannot afford to miss out on Harless, “is stereotypically dominant and
no shortage of data on the rational female talent. assertive.” Businesses need to encourage
business case,” she says, “but leaders a belief that no single behavioural style is
Childcare support and flexible or
are far more effective when they lead best – controlling or analysing, supporting
home working are important factors
the conversation from a place of real or promoting. As Pamela Harless says,
in attracting and retaining women in
passion.” Pamela calls for courageous “it’s the combination of all those styles
business.4 But Sacha Romanovitch
and committed leaders to set an example that leads to better decisions.”
describes a much deeper need:
by holding themselves accountable for
“I think women are looking for a more Individuals need permission to ‘bring
the extent to which they create an
fundamental shift in what leadership their whole selves to work’. In so doing,
inclusive environment.
looks like and what is expected of a company creates a more diverse set
Greg Keith adds “the issue of gender people in senior leadership positions.” of role models, allowing individuals to
diversity has to be led strongly and She describes the prevalence of the design an authentic leadership style
passionately by senior leaders.’’ ‘hero model’, where the individual must that is in tune with their natural selves.5
Though formal efforts – such as diversity be perfect and the job all-consuming
programmes, quotas and resource and this needs to change. Other less Lack of support
groups – may help to accelerate self-sacrificing forms of leadership
A growing area of study also explores
behaviour change, such rules cannot are overlooked.
the tendency for women to be mentored
work unless change is led from the top.
and not sponsored.6 Mentoring involves
“Women are notnaturally
support and advice offered by an
Outdated leadership models comfortable with self- employee to another employee a level
Sacha Romanovitch, chief executive promotion, so having other or more below them in the company
officer at Grant Thornton UK, fears that leaders within the business structure. It should be a private,
established notions of leadership are promote your skill and developmental relationship between
letting women down: “The issue is that expertise is helpful.” two people. A sponsor, on the other
what women see of leadership isn’t hand, advocates for employees below
always that attractive.’’ More women are Maria Cunha Matos them at the decision-making table when
finding other interesting ways to achieve Managing associate it comes to staffing high-profile projects
the balance they want – like working Linklaters Brazil and promotions. They have the power
to effect change on women’s behalf.7
4
Women in business: Turning promise into practice – Grant Thornton (2016) 5 Ibid
6
Why Men Still Get More Promotions Than Women – Harvard Business Review (2010) 7 Women in business: The path to leadership – Grant Thornton (2015)
Figure 3: Top and bottom countries survey by Grant Thornton’s IBR research programme*
Proportion senior management team female
Eastern Europe continues to top the rankings (see figure 3), Botswana has improved significantly in terms of the percentage
with Russia in the lead as the only country in which every of senior roles held by women – up eight percent from 2016
business has a woman on its senior leadership team. In Poland, at 31% – and has also seen a six percent reduction in the
the proportion of senior roles held by women has improved percentage of businesses with no women in senior leadership.
by six percent to 40%. The region owes some of its strong Nigeria and South Africa have both seen improvement, with
performance to the legacy of communist principles which the percentage of businesses with no women in senior roles
have placed women as equals for generations. falling from 15% to 9% in Nigeria, and the proportion of female
leaders increasing from 23% to 28% in South Africa.
10 Women in business
Emerging APAC Latin America
29% of senior roles are held by women; 20% of senior roles are held by women;
26% of businesses have no women in senior roles. 48% of businesses have no women in senior roles.
China remains above the global average, with a spot in the In Mexico, the percentage of businesses with no women in senior
top ten economies worldwide at 31% of senior roles held by leadership has fallen by 14%. But Brazil has seen no change over
women. Rose Zhou, acting managing partner Shanghai, at the past year. Argentina has taken a step backwards, with the
Grant Thornton China, comments that the strong performance proportion of women in senior roles falling from 18% to 15%
is partly a product of the one-child policy: “The first generation and a record 53% of businesses with no women at a leadership
to emerge from this policy is now in its professional prime. As the level. Arnaldo Hasenclever, managing partner at Grant Thornton
only child in the family, these individuals have a responsibility to Argentina, comments: “In Argentina, we have branches of
make something of their career – regardless of gender.” India, foreign companies where there are women in leading positions
however, despite a one percent improvement to 17%, continues but there are a lot of family-owned companies which are
to rank in the bottom ten countries. typically led by male family members.”
Following a slight deterioration last year, both measures have New Zealand ranks in the ten worst performing countries,
recovered to 2015 levels across the region. France and Spain with only 20% of leadership positions held by women and
lead in terms of the proportion of women in senior roles at 31% 37% of businesses with male-only executive teams. Australia
and 27% respectively, with notable improvement in Ireland – fares better, with 23% of senior roles held by women and 20%
up seven percent to 26%. Despite a three percent uptick on of businesses with no women in senior positions, but it has seen
last year, Germany trails behind with 18% of senior roles held by no movement on last year.
women. The UK has failed to repeat the progress made in recent
years, with the proportion of women in senior roles falling by
two percent to 19%, and the percentage of businesses without
women in top positions increasing by five percent to 41%.
North America
23% of senior roles are held by women;
31% of businesses have no women in senior roles.
12 Women in business
Gender and risk
Businesses face every new year with uncertainty. But the Despite now knowing the results of the UK’s EU referendum
outlook for 2016 was particularly hard to predict, with big and the US presidential election, continued unknowns about
political events keeping everyone in a state of suspense the pace, breadth and scale of these changes could weigh on
for most of the year. economies and firms around the world for some time to come.
“It’s quite simple: diversity of thinking, Many say that uncertainty is pervasive and has become the
diversity of experience and diversity of ‘new norm’. As a consequence, businesses need effective
leaderships teams equipped to assess the risks and opportunities
knowledge all help to expand our views
associated with change, and then develop and implement
on risks and opportunities.” inclusive strategies in response. We set out to explore where
Paul Badrick there are gender differences and how firms can harness
Chief executive officer these differences for more effective risk management.
Grant Thornton Johannesburg
Risk is:
Business critical
Risk taking has statistically and economically significant effects on corporate growth and earnings.9 Companies that are both
‘risk resilient’ (able to mitigate risk events) and ‘risk agile’ (able to more quickly meet new opportunities) will find long-term success.10
Male-dominated
A career in risk management has traditionally required a strong technical foundation. Graduates with a background in such subjects
tend to be men. But outside a specific career in risk management, all senior leaders must invest in (and be accountable for) risk
management programmes. Certain careers expose you to risk more than others, such as the financial industry. This, too, is
a sector traditionally occupied by more men than women.11
Stereotyped
Media reporting on business is full of common stereotypes about gender and risk. Academic literature also reveals a strong link
between risk-taking and masculinity, which further feeds popular notions that men are risk-seeking and women are risk-averse.
The media at the time of the financial crash blamed a buccaneering business culture, reckless and overwhelming male. Some
even claimed that if women had been in control, the collapse could have been prevented.12
Under-researched
Media stories may serve as a useful wake-up call on diversity in business, but do they give an accurate representation of women’s
strengths and weaknesses compared to those of men? Academic literature is rich with studies on gender differences regarding risk
perception, but speaks comparatively little about how men and women manage risk in a business context.
8
Managing Risks: A New Framework – Harvard Business Review (2012) 9 Risk Taking and Firm Growth – Peng (2015) 10 Risk in Review: Going the Distance – PWC (2016)
11
Women in Financial Services – Oliver Wyman (2016) 12 Lagarde: What If It Had Been Lehman Sisters? – New York Times (2010)
13
Analyzing and Managing Risks: On The Importance of Gender Differences in Risk Attitudes – Schubert (2006) 14 Risk as Feelings – Hsee, Loewenstein, Weber and Welch (2001)
15
Gender Differences in Risk Assessment: Why Do Women Take Fewer Risks Than Men? – Glaser, Harries and Jenkins (2006)
16
Men, Women and Risk Aversion: Experimental Evidence – Eckel and Grossman (2008)
14 Women in business
“ While women may be
taking as many risks,
they do so in areas
that aren’t as visible.”
Out with old labels Pamela Harless
The impact of biases is important in this context. We all use Chief people and culture officer
stereotypes as mental shortcuts to speed up decisions. Intuition Grant Thornton US
kicks in and we succumb to unconscious bias to reach closure
on an issue.18 This can lead us to focus on the wrong things or
fail to seek out relevant information, which results in poor
decision making.
17
Women on Board: Does Boardroom Gender Diversity Affect Firm Risk? – Gonzalez, Hagendorff and Sila (2016)
18
Women in business: Turning promise into practice – Grant Thornton (2016)
19
The Confidence Gap – The Atlantic (2014)
20
More Women at The Top: The Impact of Gender Roles and Leadership Style – Eagly (2003)
16 Women in business
Women react to risk
differently to men
Figure 7 shows that men and women Research showing that men and women Because women are more exposed,
prioritise similar risk management differ in their impulsive base-reaction she says, “if something goes wrong,
methods. Globally, both genders provides insight for our findings. Literature we’re really in the spotlight, and so
are primarily focused on running the shows that where men are most likely we sometimes pull back a bit.’’
company smoothly. Convening a to respond through action, women are
All of this affects the speed and nature
meeting of the board and analysing most likely to respond through feeling.21
of decision-making. Men are more
the commercial impact of the risk also Moreover, when confronted with
inclined to jump to a yes or no decision,
rank in the top three priorities for both uncertainty, women tend to report
which facilitates action. But by the same
men and women. fear, whereas men report anger. These
measure, men can act too quickly
emotions have different effects on our
The fact that men and women choose because they feel something has to
behaviour: where fear diminishes the risk
similar methods comes as little surprise happen fast. Here women can provide
response, anger increases it. Research
to Pamela Harless, who believes that checks and balances to encourage
also shows that stress amplifies gender
“by the time you’ve become a seasoned the right risks and opportunities to
differences in strategies used during risky
member of the senior leadership team, be pursued, as Phil Smith describes:
decisions. Men allegedly take more risk
you’ve learned how to balance different “Not only do women bring strength
under stress, while women take less risk
ways of evaluating and managing risk’’. to the group, but men are deterred
in the same conditions.22
But beyond these similarities, men from getting caught up in quick thinking.”
and women do strikingly diverge. Our Pamela Harless agrees that there’s an
Women tend to approach risk and
findings show that women are far less element of nature to gender difference,
opportunity in a holistic, detail-driven
likely to say they will act in response but she also attributes part of its effect
way. Lindsay Degouve De Nuncques
to a business risk. to nurture.
says that “women require more analysis
compared to their male counterparts
Figure 7: Tools and techniques for responding to risk because they have a greater need for
a balanced and complete view before
Risk management % women % women % men % men taking action.” Nicole Vanderbilt also
technique voting low voting high voting low voting high comments that “I have found that
likelihood likelihood likelihood likelihood women do extra preparation for a
Refer to risk mitigation plan 40% 35% 29% 43% decision, including asking for others’
input, whereas men often just rely on
Convene meeting of board 30% 48% 18% 62% themselves to figure it out.”
Establish working group 29% 43% 20% 54%
Ask the experts 32% 44% 21% 52%
Engage comms team 36% 36% 30% 40%
Analyse commercial impact 26% 49% 18% 59%
Consider new opportunity 29% 41% 20% 49%
Release additional funds 37% 32% 28% 41%
Alert staff and customers 32% 37% 19% 52%
Run company smoothly 26% 54% 13% 66%
Total 314% 419% 216% 518%
Source: Grant Thornton IBR 2016
21
Inside Her Pretty Little Head – Cunningham and Roberts (2012)
22
Risk and Reward Are Processed Differently in Decisions Made Under Stress – (2012)
Men may be more inclined to take risks and this can bring high
rewards in the form of growth. But big bets can also go wrong.
The risk awareness of women might be a significant factor for
success. Not only do women tend to moderate extreme
behaviour, they can possess a higher social sensitivity and
take time to listen and acknowledge feelings such as danger
and fear before carefully assessing the business risk and
devising a strategic plan.
18 Women in business
Risk and opportunity regional spotlight
Latin America and North America go Africa of self-confidence. Pamela Harless
against the global trend completely. Gillian Saunders explains that gender explains that “there are still some women
Here, not only do women see higher risk diversity came into play with economic who feel a pressure to conform to the
and opportunity than men (see figure 8) development much later in Africa. male prototype, but I do think it’s a dying
they are also more likely to act. Women Corporate structures are newer and were paradigm”. This is encouraged by the fact
in Eastern Europe also see more risk and less sensitive to traditional ways of doing that “girls are told at a very young age
opportunity then men, though they are business. She says: “In Western Europe, ‘there is nothing you can’t accomplish;
less likely to respond to risk. In Africa, men were entrenched in the economy you’re just as good as men,” she says.
women see higher risk than their male long before women even got the vote.
counterparts and are more likely to Eastern Europe
Women therefore had to contend with
respond to it, but in keeping with the older, systemic factors.” She also Women see both higher risk and higher
global trend they see less opportunity. comments that “African men, whether opportunity than men, which Elena
Cultural environment determines to a innately or not, feel they need to Proskurnya, managing partner at
certain extent how men and women be the breadwinner, to work, to provide. FBK Grant Thornton Russia, believes
see and respond to risk. And I think this makes them more risk is connected to the region’s strong
averse because they don’t feel free of performance on gender diversity.
Latin America She says, “I belong to a society which
societal pressure. Some of us women are
Leaders in Latin America perceive high has made it a priority to maximise
breadwinners but the pressure isn’t felt in
levels of risk in the region (see figure 8). every person’s potential for growth.
the same way, so we are open to taking
“It is a part of daily life and also a part Both women and men are supported to
more risk.”
of business,” says Arnaldo Hasenclever. take risks and seize opportunities.” It’s
He also suggests that “if you’re a woman North America why, across Eastern Europe, women are
in a leading position in Latin America, Women in North America are more likely taking leading positions even in areas
you’ve already jumped over a lot of to respond to risk compared to their that were previously perceived to be
hurdles to get there.” global peers. This is possibly a function “men’s business”.
*Average percentages across business impacts and risk management techniques from figures 5,6 & 7
Diversity in leadership
1 Take action to speak up for diversity 2 Encourage diverse leadership 3 Invest in sponsorship
and embed change throughout the styles and role models programmes, not just mentoring
organisation, not just at the top The diversity agenda is not about giving Women downplay their success to others.
Many companies are striving for gender women the confidence to operate like The emotional support offered through
diversity at leadership level. But there is a men; it’s about creating an environment mentoring is extremely valuable.
need to consider how individuals further that is conducive to all. This starts with But recognition and encouragement
down view the issue. Leaders should not the individual. The benefits of diversity from the right sponsor can have a
assume everyone understands or will not surface if people’s differences dramatic impact on an individual’s
supports the argument. Continue to aren’t allowed to actually come out in career advancement. Not only will a
articulate the commercial need to inspire their job. Leadership styles do not need sponsor champion the prospects and
those not convinced of the need of take to conform to predetermined moulds; skills of women in the workplace, but
significant steps across the organisation. nor must leadership be all-consuming. they will also protect them enough to
Leadership teams must also understand Demonstrate that there are multiple take risks and make mistakes without
how issues such as unconscious bias models of a successful leader and these hampering an individual’s career.
play into different settings, and then encourage people in your organisation
educate employees on their effects. to consider what kind of leader they “Mentoring is one thing;
Keep refreshing your approach, so that want to be. sponsorship and shared
men and women alike continue to step accountability – being elbow
back, think and act. “Firms need to re-balance to elbow – is another thing.
what leadership is to make
“In some firms, men are open And I think the latter is far
it attractive to future leaders
to female leadership and really more impactful.”
who expect the role to be
embrace it. Unfortunately, interesting, meaningful, Stephanie Hasenbos-Case
there are places where men flexible and with reasonable Global leader, people and culture
don’t embrace it and women reward too.” Grant Thornton
could be sitting at the table
but not feel able to voice Sacha Romanovitch
Chief executive officer
their opinion.”
Grant Thornton UK
Gillian Saunders
Head of advisory services
Grant Thornton South Africa
23
Women in business: The value of diversity – Grant Thornton (2015)
20 Women in business
Risk management
in leadership
1 Build mixed gender teams for 2 Provide women with leadership 3 Create a culture where taking
effective risk management opportunities that make them calculated risks is part of successful
Men and women perceive and manage familiar with risk business strategy, not something
risk differently. It’s not that one approach The majority of leadership positions to avoid
is right and the other wrong. But we need involve risk management. Experience Individuals and teams need to feel
to break with the assumption that risk and leadership bring confidence and supported, not penalised, when making
requires quick thinking and swift action. familiarity. But to nurture diverse future decisions about the risks their companies
Clearly companies that hesitate for too leaders requires confidence-building encounter. Creating cultures that clearly
long will miss vital opportunities. But the early in people’s careers. Companies communicate the organisation’s risk
international business environment has should not rely solely on technical appetite and avoid blaming people can
become more volatile, and the ability to training, but provide young women help bridge the confidence gap, and
manage uncertainty is becoming more with on-the-job experiences too, exposing allow people to ‘lean in’ and embrace risk.
important. Dynamic, resilient companies them to the process of risk management
Companies need to provide training and
will navigate the extremes with a calmer, and – where appropriate – involving
allow more room for women to experiment
more balanced assessment of the risks them. This creates a virtuous circle: the
and ‘fail well’, as Google calls it. This can
and rewards. Women are vital to this more you’re familiar with considering
be done by establishing a growth mindset
endeavour, but over a third of companies risk, the more capable and confident
where individuals and collective teams
don’t have women in senior positions. you will become.
of decision-makers can learn from their
Companies that fail to bring women
mistakes and actively seek out new
to the table will jeopardise their long-
challenges. A number of businesses in
term growth.
this report run what Nicole Vandervilt
calls ‘blameless post-mortems’. This
“Teams without diversity
analysis of past decisions to establish
are at a much greater risk a fact-based account of what happened
of going down a path without when something goes wrong, and what
considering all the options goes right on other occasions, empowers
or coming up with other people to take decisions. External
more complex solutions.” facilitators can help run such sessions
and build trust in the process.
Greg Keith
Chief executive officer
Grant Thornton Australia
22 Women in business
How Grant Thornton can help
In today’s globalised and volatile business environment
organisations need to be able to take a balanced approach to
exploring risk and opportunities to create sustainable growth.
Leaders also need to ensure they can We help you create, transform and
bring a balance of perspectives to the protect value. From exploring your
table to take decisions. Grant Thornton strategic growth options, understanding
engages with business leaders to build how to manage risk and opportunity,
and foster a resilient and collaborative to getting the best from talent, our
workforce equal to the task. global network provides the specialist
support you need to thrive in a fast-
changing world.
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