Women in business is an issue of our time.
Business grows wealth and improves our living standards – but if half the population is under-represented in business, we have less chance of success. We’ll be more successful when more women are engaged in enterprise.
Women are well-represented as employees, but not always in the highest positions.
There is a ‘career pipeline’ at work in most organisations – a pathway to progress through from entry level to senior management. Unfortunately, few women make it through the pipeline.
In many entry-level jobs there are similar proportions of male and female employees but, especially in the private sector, few women make it through to the highest positions.
Businesses could do more to retain female talent by paying attention to the leaking pipeline, and addressing the issues causing the leaks.
Implementing family-friendly policies, ensuring hiring and promoting policies are bias-free, and ensuring women are not discouraged from applying for line positions – these kinds of actions could make a big difference to the numbers of women reaching the top.
There is a significant payoff for companies that encourage women’s progression through to the highest levels.
For boardroom appointments, research indicates women bring excellent value. The Business and Industry Advisory Committee to the OECD has amassed significant research showing how much is to be gained from having more women on corporate boards.
It indicates that companies with more women on their boards perform better on sales revenue, equity, invested capital, number of customers and market share.
Such companies are better able to deliver relevant products and services, because boards with women on them are better able to understand women as consumers.
Internationally, companies with women on boards now exceed 10%, and recently the share of companies with no female directors has fallen below 40%.
This positive trend follows community, media, and investor pressure.
Of course, senior management or board positions are not the only way for women to influence business.
It’s perhaps even more important to have significant numbers of women-owned businesses.
Here the trend is also positive, at least in New Zealand.
While around one quarter to one third of all enterprises worldwide are owned by women, in New Zealand around 40% of businesses are owned and operated by women.
Many, however, are the smallest businesses – undercapitalised and not able to grow significantly.
Women-led businesses tend to be concentrated in sectors less attractive to investors – fashion, retail, education, and healthcare.
Although choosing these sectors would be partly due to personal preference, it would also be partly due to not having the skillset to operate in other sectors such as building, construction, engineering, accounting, or technology.
Such sectors require a grounding in maths, science, and technology – areas of study that are chosen less by girls.
Helping more young women and girls choose STEM skills (science, technology, engineering, and maths) when in school and tertiary education will open more business opportunities.
Regardless of sector, many women find it difficult to fund business growth.
Women entrepreneurs tend to start out with less capital – and less debt – than men. Many start out with no external financing at all and stay in a situation of underfunding.
It’s thought that different styles in pitching for investment may play a part – women may feel less comfortable asking for large enough sums, or negotiating hard enough on terms.
There are a number of factors that could help boost the chances of women achieving success in business:
Helping girls take STEM subjects in school could broaden their ability for enterprise success.
Ensuring that girls get adequate financial education in school and are alerted to the opportunities of entrepreneurship would also be beneficial.
By taking account of different styles in seeking funding, financial institutions could help more women capitalise their businesses.
And by choosing to appoint women to board positions, firms could provide a good example for other companies to follow.
Alongside other factors such as accessible and affordable childcare and family-friendly employment policies, these would make a key difference in boosting the scale and impact of women in business.
Women in business is not a women’s issue – it’s a business issue.
Phil O’Reilly is Chief Executive BusinessNZ