Increasing the involvement of women in the workforce is known to have a positive impact on economic growth. Changes to legal and corporate structures are just the first step to mending the current economic gap between men and women, which is particularly stark at the top of the private sector with only 3% female CEOs of Fortune 500 companies.

However, gender equality in both the workplace and the home can only be reached if mindsets change in parallel with the creation of new laws.

The reasons for the economic benefits of female involvement in the economy are diverse. In her opening plenary at the 2013 World Economic Forum (WEF), Christine Lagarde, Managing Director of the International Monetary Fund (IMF), suggested that by raising women’s employment rates to the level of men’s, gross domestic product could grow by 5% in the United States of America, 9% in Japan and 10% in South Africa by 20201. This would suggest that investing in, and supporting women and girls, is, in ex-US Secretary of State Hillary Clinton’s own words, “not only the right, but the smart, thing to do”.

At a more senior level, evidence has shown that the presence of a critical mass of women in senior jobs is positively correlated with a company’s performance2. Lagarde believes that women’s collaborative approach to management is due to them being more attuned, and more inclined to listen, to viewpoints of minority groups. Studies suggest that women tend to be more inclusive in their management, favouring teamwork, fostering motivation, and spurring creativity. The set of experiences acquired along women’s unique career path may increase the group’s range of perspectives, cognitive resources, and problem-solving abilities – all of which were associated with improved company performance. However, a threshold of 50% of women seems to be required for this collective intelligence to be effective3.

In the context of data illustrating the link between increased female participation and improved economic performance, it should be noted that correlation does not necessarily imply causation. Moreover, there is no consensus as to the exact magnitude of the impact of women’s participation at the senior level – there is in fact some research suggesting that it has no impact on a company’s economic performance4. Further research, perhaps in the form of a meta-analysis, will be necessary to support evidence-based policies.

The divide at the heart of gender economics is partially biological, as women are the ones who bear children and regularly assume the vast majority of reproductive activities such as childcare. In addition, research has shown that men often attribute their success to themselves and their skills, while women attribute it to the people who helped them along the way as well as luck. This lack of promotional confidence impacts the workplace. According to many5, men feel comfortable applying for jobs requiring skills which they have only demonstrated a few times, whereas women will wait to master those skills before applying.

Individuals’ reactions to similar behaviours exhibited by men and women may further deepen the gender gap: a study by Sandler6 showed that what was seen as assertiveness in men was perceived as aggressiveness in women; an outburst was diagnosed as a temporary and rare loss of control when exhibited by a man, but as emotionality or a hormonal unbalance in a woman. Sheryl Sandberg, Chief Operating Officer of Facebook, also described this disparity, noting that men and women alike wanted to work with a man who negotiated for his salary, but were less positively inclined towards a woman who did the same2. Furthermore, there appears to be a positive correlation between success and likeability for men, perceived by both genders, whereas women were less likely to be liked as their success grew2.

Facebook’s Sheryl Sandberg, who has been recently at the centre of a debate over the responsibility of women to ‘lean in’ to career opportunities, speaks at the World Economic Forum 2013 at Davos, Switzerland. World Economic Forum/Michael Wuertenberg

Do Quotas Work?
Despite the compelling argument in favour of closing the gender gap, there is evidence that some companies have limited incentive to achieve this goal, leading many to argue that government legislation is required to increase female presence on corporate boards – a process which is further hindered by the low turnover among existing board members2. Quotas that are currently in place tend to be voluntary (except in Norway, Spain, France, Iceland, the Netherlands, Italy, and Belgium7), and therefore often only suffice to maintain, rather than increase, the participation of women on boards.

Quotas that are currently in place tend to be voluntary (…) and therefore often only suffice to maintain, rather than increase, the participation of women on boards

Inspired by the example of France where an obligatory quota doubled the proportion of female board members (from 12% to 25%), Viviane Reding, Vice-President and Commissioner for Justice, Fundamental Rights and Citizenship of the European Commission, has been pushing for EU legislation that would set a 40% target for female board members by 2020. Were the current trend to continue, gender parity would only be reached in 20602. Reding has met fierce resistance, however, as could be expected given that a survey of company directors showed only 51% of women and 25% of men supported quotas in 2012.

Reticence towards quotas often stems from a belief in the lack of qualified applicants, which would imply an obligation to hire unqualified women. However, female executives working for leading companies such as Deutsche Bank and the Boston Consulting Group have expressed their support for measures giving women a better chance to make it to board level, while acknowledging the limitations of quotas8. They argue that a woman (or, for that matter, a man) who is not qualified might get the job in a quota system, but would not be able keep it. Research in Norway2, which in 2003 passed mandatory quotas for gender equality in boards of publicly-listed firms, has cast doubt on the notion that quotas favour hiring sub-standard applicants and adversely affect companies’ performance.

Closing the Gender Gap
A supportive work environment is critical to increasing gender equality. This includes, for example, the presence of role models who can enable women to discuss how to juggle their professional and personal lives3. Research conducted by Deloitte3 into its pattern of attrition among the female executives showed that the company’s male-oriented system of advancement (e.g. networking at gentlemen’s clubs or mentoring by senior male staff) ranked ahead of both the heavy workload and the decision to start a family in explaining female departures. Changing corporate cultures may therefore be crucial in promoting a more gender-sensitive work environment.

Part-time work, which is four times as common for women as it is for men9, flexible working hours and the possibility to work from home are important tools in helping working mothers to keep a foot on the corporate ladder. Sally Martin, Vice President of Commercial Services at Shell, schedules weekly phone calls with new mothers on her team to maintain a personal and professional connection, and encourages her colleagues to do the same. Working fathers would also benefit from more parent-friendly arrangements, as demonstrated by research showing that fathers who took advantage of flexible working arrangements had higher job and career satisfaction than those who did not.

Despite legislation in place to ensure equal pay for equal work, the gender pay gap averages 18% in the OECD. It should be noted that discriminatory practices account for only a third of this difference in wages, while the remainder is due to career choice, and that the younger, childless generation of women aged 22-29 is paid 3.6% more than the male equivalent in the UK1011. Some companies have chosen innovative means to address this challenge. For example, L’Oreal encourages women to return to work after their maternity leave by automatically granting them the average salary increase of colleagues in their age- and department-specific category.

Daddy Daycare
Closing the gender gap at the corporate level will ultimately require doing so at the household level, by addressing inequalities which persist due to traditional gender roles: in couples where both the man and the woman work full-time, women are still responsible for most of the housework, carrying out twice and thrice the amount of childcare and household chores, compared to their male partners. This is true even when women are the primary income earner. When accounting for both paid work and unpaid chores, women put in 21 more minutes than their partners into daily ‘work’12.

It is crucial for “our boys to be as ambitious in the home as our girls are in the workplace”, and for them to feel both confident about and responsible for accomplishing their share of housework and childcare.

In addition to enrolling men’s support in the workplace, therefore, it is also crucial for “our boys to be as ambitious in the home as our girls are in the workplace”12, and for them to feel both confident about and responsible for accomplishing their share of housework and childcare. There is reason to believe that doing so could actually prove more rewarding than expected, with research conducted in Sweden, Norway, Denmark, the Netherlands, Germany, France and Britain showing that men were happier when they took on their share of household chores13. Unfortunately, fathers actively participating in their families’ caretaking did not always find their workplace to be understanding of their choice.

Companies need to be more innovative and open-minded in granting both men and women parental leave and flexible work structures.

Quotas may go a long way in ensuring that women make it to the upper echelons of corporations, but the path will be neither easy nor pleasant until mindsets change. Companies need to be more innovative and open-minded in granting both men and women parental leave and flexible work structures. Men need to be aware of the pressures women face in the workplace, and be more supportive both at work and in the household. Women need to be more proactive about taking chances, fighting for what they want, and respecting their peers’ and partners’ professional and personal choices. Only when individual attitudes and institutional policies align to promote gender equality will men and women be free to pursue success as they see fit to define it, be it by raising a family or making it to the top of the corporate ladder.