Business, Innovation and Skills CommitteeWritten evidence submitted by Catalyst

Catalyst appreciates the opportunity to submit written evidence to the UK’s House of Commons Business, Innovation and Skills Committee regarding its inquiry on women in the workplace. Our organization is the leading nonprofit research organization expanding opportunities for women and business. With offices in Europe, the United States, Canada, and India, and more than 500 preeminent corporations as members, Catalyst is the trusted resource for research, information, and advice about women at work.

Given Catalyst’s extensive background and work in these areas, we have provided comments in response to the following questions:

How should the gender stereotyping prevalent in particular occupations, for example in engineering, banking, construction, and the beauty industry, be tackled?

Why are there still so few women in senior positions on boards, and what are the benefits of having a greater number?

At Catalyst, we believe that gender stereotyping is one of the most persistent and pernicious obstacles to women’s advancement in the workplace. Because stereotypes create an invisible barrier, they are often difficult to combat or even detect. In our 50-year history we have discovered and documented previously unrecognized examples of gender stereotyping, including but not limited to the following:

1.The misconception that men and women should behave in ways that are gender-consistent. The prescriptive nature of gender stereotypes prevents change by making it difficult for women and men to counter certain norms for fear of social judgment and/or rejection, eg:

(a)Women in the workplace are often viewed as either too tough or too soft, but rarely just right.

(b)Women are expected to perform at a higher level than their male counterparts—and for lower rewards.

(c)Women are often seen as competent but unlikable, or likable but incompetent; they are rarely perceived as both good at their jobs and pleasant to work with.ⁱ

2.Perpetuation of inaccurate assumptions about what a successful leader “looks like.”

3.Talent management systems and company practices which often unconsciously reward traits more commonly associated with men and devalue those commonly associated with women.

4.Furthermore, Catalyst has found that gender stereotyping varies by region and cultural context. Global companies must bear these differences in mind when identifying leadership potential and developing employees across regions:

(a)Catalyst research shows that in most Western European and North American cultures, male leaders perceive that women do not possess the most highly valued leadership traits but are proficient in demonstrating less valued leadership behaviors.ⁱⁱ

Catalyst recommends that organizations interested in counteracting systemic gender biases do the following:

5.Educate leaders about how stereotypes can negatively influence job assignments and performance appraisals.

6.Examine current talent management systems for the presence of gender-stereotypic language and expectations.

7.Develop programs that target the needs of each business unit while taking into account the various forms gender stereotyping can take.

8.Train employees at all levels to recognize effective gender-neutral leadership characteristics.

9.Create opportunities for senior leaders and employees to engage in talent management dialogues.

10.Review best practices from other companies and create strategies that increase development and advancement opportunities for women.

As for women on boards, Catalyst believes that the number of women board members remains low in part due to the persistence of the kind of gender stereotyping identified above. We also believe that the Committee on Business, Innovation and Skills should and must promote gender diversity on boards, for the reasons outlined below:

The business case for gender diversity on boards is stronger than ever. Our research suggests that gender diversity leads to diversity of thought, generates innovative ideas, and increases board efficacy and corporate competitiveness.

Catalyst has studied the relationship between the representation of women on corporate boards and corporate financial performance. Our research on Fortune 500 companies finds a clear and positive correlation between women board directors and enhanced corporate financial performance, particularly when a company sustains its commitment to gender diversity over time:

11.Companies with the highest percentages of women board directors, on average, outperformed those with the lowest.

12.Companies that sustained board gender diversity (three or more women in at least four or five years) outperformed those with non-gender diverse boards by a wide margin: their return on sales was 84% higher; return on invested capital was 60% higher; and return on equity was 46% higher.ⁱⁱⁱ

Gender diversity on corporate boards is good for companies, and it’s good for society.

13.Diverse boards can provide more than just financial benefits. Our research demonstrates a positive correlation between women board directors and the gender diversity of a company’s senior leadership team—there is a predictive link between a company having more women board directors and that same company having more women executive officers, five years later. And our research shows that advancing more women to senior leadership roles benefits everyone.^iv

14.Gender and Corporate Social Responsibility: It’s a Matter of Sustainability, a study Catalyst conducted with researchers from Harvard Business School, found that companies with more women board members and executive officers are, on average, more committed to practicing corporate social responsibility and tend to create higher-quality programs in service to that goal.

15.According to our research, in 2007, companies with gender-diverse boards made annual corporate donations 28 times higher than those without. A company’s annual philanthropic giving increased by $2.3 million for each additional woman board member.^v

Leaders of diverse backgrounds bring different and fresh perspectives, foster innovation and creativity, and ensure independence of thought, which is a crucial characteristic of good governance. Gender diversity in a company’s boardroom can signal to employees that the company’s leadership is inclusive and respectful of differences among its employees and customers, as well as its shareholders and investors.^vi

For all of the reasons above, Catalyst believes that by eliminating gender stereotyping and cultivating gender-diverse boards, companies will be able to compete more effectively in today’s increasingly complex global marketplace.

We appreciate the opportunity to provide written comments on these pressing matters and we hope you will contact us with any further questions. We would be happy to submit further documentation in support of the above claims should the Committee wish to review it.

References

ⁱ The Double Bind Dilemma. http://catalyst.org/knowledge/double-bind-dilemma-women-leadership-damned-if-you-do-doomed-if-you-don%E2%80%99t-0

ⁱⁱ Catalyst, Different Cultures, Similar Realities: Stereotyping of Western European Business Leaders. http://catalyst.org/knowledge/different-cultures-similar-perceptions-stereotyping-western-european-business-leaders

ⁱⁱⁱ The Bottom Line. http://catalyst.org/knowledge/bottom-line

^iv Catalyst, Advancing Women Leaders: The Connection between Women Board Directors and Women Corporate Officers. http://catalyst.org/knowledge/advancing-women-leaders-connection-between-women-board-directors-and-women-corporate

^v Gender and Corporate Social Responsibility: It’s a Matter of Sustainability. http://www.catalyst.org/knowledge/gender-and-corporate-social-responsibility-it%E2%80%99s-matter-sustainability

^vi Catalyst, Advancing Women Leaders: The Connection between Women Board Directors and Women Corporate Officers. http://catalyst.org/knowledge/advancing-women-leaders-connection-between-women-board-directors-and-women-corporate

20 December 2012