Updated: Jan 12, 2020
The United Nations Sustainable Development Goal 5 aims to achieve gender equality and empower all women and girls. In the 21st century, one of the battlefronts for equality is in the ubiquitous middle and upper management positions where women still fall behind significantly in their representation.
According to the Peterson Institute for National Economics, the presence of women in corporate leadership roles has been positively correlated with company size, profitability, and with a decrease in discriminatory attitudes toward female executives.
These findings are confirmed by a 2017 report by the consulting firm McKinsey in which it quantifies that having women in positions of leadership can represent an increase of up to 44% of profitability for enterprises in Latin America. The boost in profits is attributed to a greater access to a broader pool of talent with diverse skills and a more accurate identification of consumer insights for companies that have a large female customer base. Despite these significant advantages, the visibility of females in executive roles has decreased during the last decade for Latin America, when compared with the rest of the world.
What is the current state of affairs in Latin America?
The percentage of women who participate in middle and upper management has decreased since 2010 from 37% to 33% in 2018. The lack of consistent growth in management roles mirrors a stagnant rate of female participation in the workforce for the region. The workplace participation rate for females has not seen variability beyond 1.5 percentage points from an average of 46% since 2010. A concerning aspect of these numbers is the disproportionately high rate of informality in jobs held by women. Females who earn advanced degrees are more likely to remain active in the workforce.
The Dominican Republic leads the pack of countries with the highest representation of women as executives in the private sector (51% ) since 2016 -2018. Caribbean countries have exhibited leadership as nations with the highest rates of women in management roles in Latin America. In 2017, Jamaica emerged as a leader of this trend with a reported 56% of women in management roles.
Continental countries in Latin America have not kept the same pace and the rate of women in middle and upper management has decreased over the years. (See Figure 1.). The reasons why this part of the region perform differently is not entirely clear and it may be due to a variety of factors. However, women have other high visibility roles to demonstrate their leadership such as seeking and securing more equitable political participation and as entrepreneurs.
For example, while Bolivia has the lowest percentage of women in management roles at only 28%; it stands out as the country with the highest representation of women in political office (40%) during the same period (2016-2018).
Latin American women’s participation as owners of enterprises also shows promise globally. Since 2010, Latin American countries figure with above average levels in their global distribution when measuring firms that have at least one woman as part-owner (See Figure 3.).
What are the challenges to bring women to upper management?
According to a 2013 McKinsey study, women face several barriers on their way to the top. These challenges include the double-burden syndrome” where they must carry out professional and domestic responsibilities, the expectation to be available all the time for work, a lack of public policies that advance the interest of women in the workplace and corporate and societal norms that contribute to stall the advancement of women managers in the region.
Guatemala is one country where levels of gender equity is increasingly elusive in the upper ranks of private enterprises, but it wasn’t always that way. Since 2010, Guatemala experienced a drop on the share of women who reported being managers of over 50%. This decline began after 2011 and was accelerated between 2011-2013. The drop in female managers mirrors a similar downward trend of 2.5 points in the national GDP. However, the gains attained the following year, 2 points, did not translate to equal gains for women in management roles. These declines were compounded with a drop in the employment rate which affected both women and men, but with a steeper decline in employment for women.
Which countries are working to make it better?
Countries from the region known as Cono Sur, which comprises Argentina, Chile, and Uruguay show the most significant improvements for women in leadership roles within the private sector for the decade. These trends also parallel some advances in the area seen across other relevant indicators such as increases in formal employment, primarily due to a mix of labor reforms that improve working conditions for women by incentivizing the formalization of work.
Jamaica, also rolled out a women empowerment initiative on 2010 backed by the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) with a funding of $7 million. The Way Out project seeks to implement Jamaica’s National Policy for Gender Equality and has been attributed mainly as a pivotal factor in boosting gender equality on the island.
The implementation of quotas in several Western European countries that require the boards of listed companies to be between 30%-40% composed of women is oftentimes seen as a model to follow since Norway rolled out the first of such policies more than seven years ago. However, a recent 2018 study by Oxford University found that such initiatives have little to no discernible effect in boosting the enrollment of women in upper management beyond the boards.
Surprisingly a similar approach of quotas requiring a proportional representation of women in political office has been very successful in some countries in the Latin American region. For example, in 2013, after the implementation of a law that mandated equal representation for women in the National Parliament, Bolivia saw a spike from 25% to over 50% of female political participation the following year (2014).
Improving gender diversity in management offers a ripple effect of benefits from the employee at the individual level, to the enterprise, all the way to the country’s economy.
Management roles are generally better paid and offer access to more significant opportunities for advancement and skill development than other types of employment.
The Center for Philanthropy at the University of Indiana found that women often donate more to their communities and at a higher frequency rate than men and charities. These findings extend across all age brackets and other demographic indicators such as ethnicity, or income levels. Women’s contributions enhance and improve the quality of life of those around them.
It is incumbent upon all of us develop strategies and support policies that empower women to succeed and climb the corporate ladder because these triumphs carry over and benefit their families and the communities where they live. By doing so, you can help support United Nations Goal 5 to achieve gender equality and empower all women and girls. To learn more about this goal and its developments in Latin America and around the globe, please visit the United Nations and the Observatorio de Igualdad de Genero en America Latina (in Spanish).