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Asian Companies Struggling to Promote Female Leaders

By Melissa J. Anderson (New York City)

According to the latest research on gender diversity by McKinsey & Company, women are sharply underrepresented in leadership at Asian firms – and senior managers don’t seem to be doing anything about it.

That’s a problem, considering the rate of growth in Asia, explained Dr. Claudia Sussmuth-Dyckerhoff, co-author of the report and a Director in McKinsey’s Shanghai Office. She said, “Given tight labor markets and intense competition for talent across Asia, there is a strong business imperative for Asian companies to better tap the female talent pool. That means gender diversity needs to become a corporate priority.”

The researchers (Dr. Sussmuth-Dyckerhoff, Jin Wang, and Josephine Chen) point out that women’s leadership is extremely low across the region, despite the diverse cultures represented across several countries. Not only that, the report continues, almost three quarters of the business leaders surveyed (70%) said that gender diversity is not a top-ten strategic issue for their companies. This suggests that the gender bias is significantly entrenched within Asian companies and could be difficult to change.

Leadership Diversity

The study, “Women Mater: An Asian Perspective” features an analysis of the gender composition of boards and executive committees of 745 companies from the local stock indices of ten Asian markets. The report authors also surveyed about 1,500 senior managers from those markets.

They found significant diversity across markets. For example, in India, female labor participation is only at 35%. In comparison, in China, it’s at 74%, one of the highest rates in the world. Nevertheless, leadership participation is extremely low across Asia, and in fact, despite the high participation of women in China’s workforce, only  “only 8 percent of corporate board members and 9 percent of executive committee members are women.”

Wang, Partner in McKinsey’s Shanghai Office, commented, “Even when women do enter the corporate world, they often fail to progress very far, either getting stuck in the pipeline early in their careers or deciding to leave at middle management.”

The report continues, “On average, women account for 6 percent of seats on corporate boards in the ten markets we studied, and 8 percent of those on executive committees. The comparative figures in Europe and the United States are 17 percent and 10 percent, and 15 percent and 14 percent respectively.”

McKinsey goes on to explain that while the business case for diversity has been proven, companies must work toward diversity at every rank within their organizations to achieve those benefits. Wang continued:

“As Asian companies compete in a globalized market place, companies who don’t work to improve women’s participation are surrendering two important sources of competitive advantage: having the best talent in an age of talent scarcity, and the particular performance benefits that women in leadership positions bring to an organization.”

Solutions

McKinsey continued that it has identified three ways for companies to increase the percentage of women throughout their workforces. First of all, the report says, each company must have support from leadership. Unfortunately, this is not the case at many Asian companies.

“Only 15 percent of participants said their top management team monitored gender diversity and made efforts to improve it, and just 10 percent said their companies included gender diversity indicators in executives’ performance reviews,” the report says.

Second, the report says, companies need to develop programming to support diversity, and here too Asian companies were not making much effort. “In addition, only 12 percent of companies had what we would describe as a well-balanced gender diversity program in place, in that they had implemented initiatives in each part of the ecosystem.”

Finally, McKinsey believes that companies must develop “enablers” that support women’s progress up the ranks. “These include indicators to identify inequalities and track improvements, human resources processes and policies, and support mechanisms such as help with child care,” the report explains.

And in fact, on average, companies in Asia are more frequently providing enablers for women. For example, it continues, “32 percent of respondents said their companies offer flexible working hours, while 28 percent offer support services such as help with child care.”

But whether they are used by women is another issue. Without significant support from the top, as well as programming that builds a culture of gender inclusion, women probably won’t feel they have “permission” to utilize such enablers.

Companies that want the competitive edge when it come to talent in Asia must work toward greater support for female leadership. Highlighting the importance of senior management support for gender diversity, Dr. Sussmuth-Dyckerhoff added, “Asian companies and economies across the board stand to benefit enormously from better tapping the female talent pool. Getting the issue of gender diversity on the corporate agenda across the region is simply good business.”

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