Breaking the glass ceiling
Coincident with the celebration of International Women’s Day last March 8, international audit firm Grant Thornton, through local member Punongbayan & Araullo, released its findings on the status of women in Philippine boardrooms.
The report showed that four out 10 senior positions are filled by women. This makes our country the third highest employer of senior female executives worldwide, with Russia on top and Indonesia and Latvia tying for second place.
This year, there are more Filipina chief executive officers—37 percent from 23 percent last year—and chief operating officers—26 percent from 15 percent. For the position of chief finance officer, the proportion remains at 59 percent.
As the country’s economy continues to improve, the number of women directors is expected to increase further.
The proverbial glass ceiling that limits, if not blocks, the rise of Filipinas in male-dominated local businesses is slowly, but surely, being broken.
This development should not come as a surprise for a country that has had two women assume the highest political position of the land under extraordinary circumstances and at the expense of their male predecessors.
Although some of these women got their positions on account of their bloodline, the fact remains that the majority earned them through merit or hard work.
Mandatory
They are where they are now without the benefit of affirmative action, or a law or regulation that required that they be given preferential treatment or be “favorably discriminated” in their professional development.
In other countries, laws had to be enacted to ensure meaningful representation of women in the boardrooms or in decision-making organizations. Without government intervention, the glass ceiling might as well as have been made of steel.
According to reports, at least seven countries make it mandatory for publicly traded or listed companies to adopt gender quotas in their boardrooms.
Norway, France, Spain and Iceland require that women constitute 40 percent of boards of directors. Belgium and Italy have pegged it at 33 percent.
In the case of France, by 2017, the quota will also apply to businesses that have more than 500 employees or revenues of more than 50 million euros (roughly P3.1 billion).
Israel, the country reputed to be the first to impose the “pink quota” in 1999, requires all publicly traded companies to have at least one woman director.
To date, Norway may be considered as having the strictest gender quota law: Companies that fail to meet the 40 percent women membership requirement without any justifiable reason can be ordered dissolved by order of a court.
Policies
Although aware of the need to increase the participation of women in corporate decision-making, Germany, the Netherlands, Sweden and the so-called bastion of racial, gender and social equality, the United States, are averse to the idea of accomplishing that objective through legally mandated quotas. They prefer that the companies concerned open their boardroom doors to women at their own terms or pace, rather than because of government pressure.
In 2012, Denmark went through this route by adopting a “flexi-quota” system where the companies set their policies and targets on increasing the membership of women in the board of directors, and announce these themselves to the public.
Consistent with corporate governance rules, these companies regularly disclose to the public their compliance with their commitments.
In the United Kingdom, regulatory authorities have adopted a voluntary approach by encouraging the Top 100 listed companies to increase, by 2015, to 25 percent the representation of women in their boardrooms.
If this benchmark is not met within that period, its Parliament has served notice of its intention to implement tougher measures, including the imposition of quotas.
To underscore the seriousness of Her Majesty’s government in this endeavor, in 2012, Prime Minister David Cameron sent a personal letter to the companies that failed to set their women director targets for 2013 or 2015.
Controversy
The move to promote the election or appointment of more women in the boardrooms through legislative fiat has drawn varying reactions from the affected parties.
Critics say this mode of affirmative action undermines efforts to make merit or qualifications, rather than gender, as one of the criteria for election to the highest corporate policy making body.
The compulsory inclusion of women in the boardroom could lead to “tokenism” or the practice of making them directors for the sake of showing compliance with the quota, regardless of their competence for the position.
Reserving certain number of seats for women in the boardrooms has also been viewed as undue interference by the government in the management of private business.
A European business adviser said the “one-size-fits-all quotas interfere disproportionately with the freedom of companies and shareholders to organize their own affairs.”
There is likewise the apprehension that “pink quotas” may make governments overlook the cultural, social and economic circumstances that prevent the entry of more women in the boardrooms.
The idea is, women should be empowered through education and skills training, rather than the accident of their gender, to be meaningful participants in corporate governance.
The proponents of mandated quotas, however, hold the view that affirmative action is needed because the deeply entrenched biases against women that prevent them from realizing their true worth in our society cannot be removed without government intervention.
The experience of the countries that have used affirmative action for related purposes shows that, properly administered, it can result in lasting and meaningful benefits not only to the beneficiaries but to the community as well.
Happy women’s month!
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