Women in senior roles and new perspectives on risk

8 March: according to the annual Grant Thornton survey, globally, only 25% of senior business roles now held by women. In Italy, the proportion rises to 27%.

• Proportion of senior roles held by women increased 1% from 2016, but up only 6% since start of research 13 years ago
• Percentage of businesses with no women in senior management rose from 33% in 2016 to 34% in 2017
• In Italy, the proportion of senior roles held by women is 27% in 2017 (even if this has decreased from the previous year), while the percentage of businesses with no women in senior management is 36%

On International Women’s Day, a new report based on Grant Thornton’s annual survey of 5,500 businesses in 36 economies reveals the global proportion of senior business roles held by women has hit a high of 25%.

However, the findings show that progress remains slow. The figure for 2017 is an increase of just one percent from 2016, and the proportion has only improved six percent in the 13 years since the research began. In addition, the percentage of businesses globally with no women in senior management has also risen, from 33% in 2016 to 34% in 2017.

As the issue of uncertainty dominates the business agenda in 2017, Grant Thornton’s report, Women in Business: New perspectives on risk and reward [ 3082 kb ], highlights the importance of gender diversity in senior teams tasked with managing risk.

Francesca Lagerberg, global leader for tax services at Grant Thornton International Ltd, said: “This year, businesses have reached a milestone, with a quarter of senior roles held by women for the first time. But this is a marginal improvement and we’re still only halfway there. Despite evidence linking diversity and improved business performance, the global dial is shifting at a painfully slow rate. This is a real concern for business growth as it suggests we aren’t maximising the potential out there”.

Grant Thornton’s data shows developing regions continue to lead the charge on diversity with developed economies lagging behind. Eastern Europe performed best, with 38% of senior roles held by women in 2017, up from 35% in 2016, and the percentage of businesses with no women in senior management falling from 16% in 2016 to just 9% in 2017.

Meanwhile the MINT economies (Mexico, Indonesia, Nigeria and Turkey) saw the most improvement, with the proportion of senior roles held by women rising from 24% in 2016 to 28% in 2017 and the percentage of businesses with no women in senior management falling from 36% in 2016 to 27% in 2017.

This is a significant contrast to the major economies of the G7, which have remained static with 22% of senior roles held by women and 39% of businesses with no women in senior management.

The research reveals that the individual countries with the highest proportion of senior roles held by women are Russia (47%), Indonesia (46%), Estonia (40%), Poland (40%) and Philippines (40%). The countries with the lowest proportion of senior roles held by women are Japan (7%), Argentina (15%), India (17%), Germany (18%), Brazil (19%) and the United Kingdom (19%).

The situation in Italy

In Italy, the percentage of women in top management roles is 27% in 2017 (higher than the global average) but this is lower compared to 29% in 2016. However, also the proportion of businesses with no women in senior management, i.e. 36%, is higher than the global average and has remained substantially unchanged from 2016.  

Simonetta La Grutta, Partner – Head of VAT at Bernoni Grant Thornton said: “Data show that the number of women playing senior leadership roles is increasing at a slow rate, essentially due to cultural reasons. Among the main hindering elements there are business policies implemented to support women’s growth at a managerial level. In fact, these consist more in ‘mentoring’ activities, implying a hierarchic relationship – where the mentor provides advice to the mentoree – rather than in ‘sponsoring’ ones, implying a functionally equal relationships based on a direct involvement of women fostering their growth.

“The survey also highlights that companies can hugely benefit from the different way in which women and men see and respond to risk, particularly in uncertain economies and highly volatile markets; the assumption that the managerial approach of women is essentially risk averse turned out to be wrong. In fact, in cases of crisis or highly risky situations, women will more easily adopt a holistic approach and carefully analyse the broader context to make strategic decisions and get through the crisis.”

Roles of women in senior leadership (global average)

Grant Thornton’s survey also reveals the types of senior management roles women hold, and finds that the number of female CEOs is on the rise. While the most common roles for women are still Human Resources Director (23% in 2017) and Chief Financial Officer (19% in 2017), Chief Executive Officer / Managing Director is now third at 12% in 2017, up from 9% in 2016.

Francesca Lagerberg comments: “It is encouraging to see a rise in the number of women in the leading executive role. In particular, I’m pleased that the G7 has made progress in this area, with the proportion of women as CEO rising from 7% in 2016 to 11% in 2017. This gives a spark of hope that there is some change coming through.”

How men and women see and respond to risk

Grant Thornton’s report also explores the role of gender when it comes to spotting and managing risks, by either seizing the opportunity or managing the threat that risk can bring.

Francesca Lagerberg said: “Our research challenges the presumption that women are risk averse and will therefore see high levels of risk in the business world. It suggests that women will not rush to label a situation as a risk and mitigate it. Instead, they will consider the context and nuance fully, and respond in ways that recognise the wider environment and the impact their decision will have on people as well as on the bottom line.”

“Uncertainty is high on the business agenda in 2017 so these differences in approach and viewpoint can be a strength for companies. The international business environment has become more volatile, and the ability to manage uncertainty is becoming more important. Diversity of thinking at the senior level gives management teams a wider peripheral vision of what constitutes a risk and provides a more balanced approach for reacting to it, either as an opportunity or a threat. Gender diversity in firms’ decision-making teams could ultimately be the difference between reaping success or failure.”