The Work-Family Narrative and How It's Hurting Women

Gender inequality in the higher echelons of the corporate world has made the news a lot lately – from the UK to Nigeria to Ireland, but the discussion at this week’s WAPPP seminar, "The Work-Family Narrative as a Social Defense: Explaining the Persistence of Gender Inequality in Organizations," focused on the discrepancy in American professional service firms. Despite large gains at the associate level of such organizations, where female employees now comprise roughly half of the workforce, women are severely underrepresented in elite positions. According to the 2013 Catalyst Census, only 15% of C-Suite executives in Fortune 500 companies are women.

Robin Ely, a Professor of Business Administration and Senior Associate Dean at Harvard Business School, presented her research and hypothesis on why such inequality persists. She and her coauthors Irene Padavic and Erin Reid conducted interviews with 107 professionals in a mid-size global consulting firm, where 90% of partners were male. Most employees surveyed said they believed that the inequity was due to the fact that women are disproportionally affected by personal obligations, which can hold them back in a corporate environment where 70-hour weeks are common.

This idea isn’t new; it has been circulated in the news media for over a decade since it was first prominently discussed in a 2003 New York Times Magazine article titled, “Why Don’t More Women Get to the Top? They Choose Not To.”

Professor Ely has an alternative hypothesis, however: that this phenomenon is caused by overselling and over delivery (i.e. overpromising) on the part of partners, paired with associates’ compliance in order to stand out as strong employees.

This creates a 24/7 work culture within elite firms that makes it virtually impossible to balance one’s personal and professional lives, for both men and women. Instead of addressing this culture head on, Ely et al argue that employees use a social defense (a collective arrangement used by an organization to protect against threats and conflicts) to fend off the anxiety this conflict causes.

This social defense splits the professional and personal spheres and then projects the latter onto women. By psychologically assigning women to the private sphere (what Ely calls “privatizing women”), organizations perpetuate the idea that women will prioritize their personal life over their professional one, making them less able to take on management work.

Unfortunately, policy changes may not be enough to resolve this pervasive issue. For example, many elite firms have improved their family leave policies, but women still overwhelmingly use these policies compared to men. Ely argues that a shift in culture is needed, paired with dialogue that references the changes and what they mean for the narrative of the organization.

Download the seminar podcast (right click and save)

Changing the Face of Corporate Governance

In an attempt to promote gender diversity on corporate boards, a number of countries including Norway, France and Spain have adopted quota-based models. According to constitutional lawyers, such a model has no chance in the United States. So when large institutional investors lobbied the Securities and Exchange Commission (SEC) to collect information about corporate board diversity practices, the US adopted a disclosure-based approach to the issue.

In 2010, the SEC began to require publicly traded companies to disclose in their proxy statements certain information about diversity considerations in board nominations. A proxy statement is a special report sent to shareholders in advance of the company's annual meeting.

Aaron Dhir, Associate Professor of Law at the Osgoode Hall Law School at York University, combed through the proxy statements of all S&P 100 companies for 2010 and 2011. Two years is not enough time to actually see board composition changes, but Dhir’s qualitative and quantitative content analysis presents a picture of the corporate response so far and raises questions about the efficacy of the SEC rule as a nudge toward greater board diversity.

In contrast to the command and control quotas, the idea behind more subtle nudge-based new governance models is that behavior can be changed by regulations that facilitate reflection by senior executives upon diversity and disclosure of relevant outcomes to the interested public. The approach takes longer to bear results than a simple requirement would, but it is supposed to facilitate change that is perceived less as an imposed burden and more as an organic development.

Under the 2010 SEC rule, annual proxy statements had to include whether the board nominating committee considered diversity in director nominations, if so, how the consideration was made, and if there was a board diversity policy then how this policy was carried out and evaluated.

The SEC did not provide any particular definition of diversity. As a result, Dhir found that the vast majority of companies considered diversity in terms of experience. Some of them considered demographic factors alongside the experiential diversity, but a number of firms limited the discussion at experience, which is, arguably, something that any board would do without any rules. So while the SEC regulation shed light on corporate board practices, it may not have changed those practices in any appreciable way.

Berkshire Hathaway Board of Directors, photo by Gregg Segal, CNN Money

Further bringing into question the rule’s efficacy as a “nudge” is Dhir’s finding of very little change between 2010 and 2011 statements. Ongoing reflection about board diversity would, presumably, be reflected in some kind of practice change from year to year, but it seems like in this case the rule prompted creation of a boilerplate language to be used and re-used. This raises another troubling question – if the rule simply allows corporations to “check the box” on diversity, then it may actually inhibit meaningful progress.

While the spirit of the rule is arguably to foster greater corporate diversity, the letter of the rule as it currently stands does not push companies to change their practices in any way. In fact, it even allows for responses like Berkshire Hathaway’s:

“In identifying director nominees, the Governance, Compensation and Nominating Committee does not seek diversity, however defined.”

Since the rule does not require companies to consider diversity, just to disclose whether or not they do, BH's response is completely appropriate.

This is where the shame factor comes in. For a disclosure-based policy to be effective in changing behavior there has to be an internalized social norm that certain responses will be met with disapproval. However, if there is no such social norm then the disclosure is meaningless.

Dhir argued that while the importance of diversity has been recognized by corporations on an operational level, this mentality has not yet permeated the thinking of boardrooms about their own diversity situation. Several audience members went further, positing that diversity is not even a broadly recognized social norm in the U.S.

Having engaged in discussions on the matter and read comments on articles dealing with race and gender, I recon more Americans would endorse some notion of meritocracy than embrace the intrinsic value of diversity.

To change the face of corporate governance, I believe we need not only a stronger nudge from the SEC, but also more pressure on companies from the institutional investors who pushed for the rule from the beginning. (Like this "Say No to All-Male Boards" campaign). We also need to see more research from organizations like Catalyst, demonstrating that diversity is a smart business practice. Perhaps with a concerted effort we can convince enough people to tip the balance toward making diversity a widely-held social norm.

Anya Malkov is an MPP candidate at the Harvard Kennedy School, a WAPPP Cultural Bridge Fellow, and an alumna of From Harvard Square to the Oval Office.

How Do Women “Start-Up” Differently?

The Woman: Lakshmi Balachandra, WAPPP Fellow; Visiting Assistant Professor, Entrepreneurship & Innovation, Northeastern University

The Talk: Entrepreneurial Women! Exploring the Role of Gender in Short-Term and Long-Term Entrepreneurship

The Question: Does gender matter when securing seed funding?

Most policy makers and academics agree entrepreneurship is a catalyst for economic growth and global competitiveness. It creates new jobs, stimulates wealth, and increases overall GDP and standards of living. Yet, while women account for 55 percent of start-ups, they receive less than 5 percent of seed funding -- why is this?

Introductory Statistics:

• According to the Global Entrepreneurship Monitor, women started 104 million businesses in the world in 2011.
• Women start businesses more frequently than men, but many times these businesses are not documented because they are considered second jobs.
• Women view entrepreneurship as attractively as men - they want to become entrepreneurs.

What explains this 5 percent?

Many myths perpetuate this dismal statistic. They include: women have different networks than men; women come from different backgrounds and professional experiences; women don’t “think big enough”. The Diana Project countered many of these myths over a decade ago in Women Business Owners and Equity Capital: The Myths Dispelled. Thus, Balachandra’s current research looks to understand the differences at the early stages of entrepreneurship, or more specifically, the “pitch”.

Balachandra’s research analyzes three years of “pitches” from the MIT’s prestigious $100K Entrepreneurship Competition to determine what makes pitches successful when attracting early-stage capital investment. By coding separately for body language, verbal phrases, and style, Balachandra found the most successful pitches were ones in which the presenters were confident, calm, and optimistic. For women, being assertive, dominant, and ambitious were viewed more positively.

How did gender play out in the competition?

While women were less likely to initially pursue high growth entrepreneurship opportunities (26 of the 185 pitches were by women), Balachandra's research found that women were stronger presenters than men. Furthermore, women received more than 30 percent of the awards in the last three years, even though they were only 14 percent of the pitches.

Additionally, women were more likely to start a business after the competition than men (95 percent compared to 75 percent) even if it was not the business she initially pitched. Balachandra says that, “once women were introduced to entrepreneurship environment, they were more likely to pursue entrepreneurship, regardless of short term success.”

Melissa Sandgren is a MPP1 at the Harvard Kennedy School and a participant in WAPPP's From Harvard Square to the Oval Office program.

Do Women Make Board Meetings More Effective? - WAPPP Seminar Series

The Woman: Miriam Schwartz-Ziv, Fellow, Program on Corporate Governance, Harvard Law School
The Talk: When All Are A-board: Does the Gender of Directors Matter? (paper pdf)
The Question: Do Women Make Firm Boards More Effective?

Imagine you're a man walking into a meeting of your firm for the first time and see this group of individuals discussing decisions in the company:

Seems like a pretty normal set-up. A majority-male board -- which remains the standard in most private-sector firms -- awaits you.

Your group of 7-10 people will meet, discuss, and make recommendations to the CEO in an environment that is off the record, behind closed doors.

Now, imagine you walk into the same board room and see this:

Does the gender change effect how productive a company is?

According to Miriam Schwartz-Ziv, mixed gender boards that have 3 or more female directors present at meetings perform better than all-male boards.

Researching over a year's worth of minutes from 11 firms in Israel, Schwartz-Ziv was able to calculate small but significant rises in the amount of initiative boards took relative to previous meetings, as well as how much information the board asks from the CEO (when controlling for 3+ women, she found that there was an 87% increase in asking for information).

According to Schwartz-Ziv, these two metrics imply that there is a "peer monitoring" effect that forces the genders to be more proactive. "Women may tend to not assume as much as men do, so they ask for more information," say Schwartz-Ziv. "And because someone besides men is in the room, there's a feeling of needing to take action'."

What exactly is at play is hard to tell. Since board meetings happen behind closed doors, it's often difficult to understand how content, interpersonal relations, and personality play into the decision-making process. Since the study was conducted in Israel, it's also difficult to know if the results would be replicable in countries where gender parity is far wider, or where women do not have strong leadership roles in the private sector.

Lastly, is the peer monitoring effect a question of gender and status, or just gender? Put another way, if a female secretary were in the room instead of a director, would men still feel pressed to be more productive at their meetings?

While these questions remain, Schwartz-Ziv's study has important policy implications for firms that are thinking about whether or not they should factor gender into their leadership decisions. At best, there is evidence to imply that it may be better to encourage more female leadership at the decision-making process in order to make firms more productive.

Women, Business, and the Law - WAPPP Seminar Series

The Woman: Rita Ramalho, Program Manager, Enterprise Analysis Unit, The World Bank Group

The Talk: Women, Business and the Law 2012: Removing Barriers to Economic Inclusion

The Question: How do laws in different countries affect a woman's ability to start businesses and get jobs?

A lower retirement age sounds pretty decent, right? Who wants to work into their 70s, after all? Shorter working days sound good, too. A good work-life balance is strike in this fast-paced world.

But while these may sound like job perks, they're the sorts of prohibitive laws that keep women from achieving the same economic status as men in many countries, say researchers from the World Bank.

In a recent survey of 141 economies conducted by the Enterprise Analysis Unit of the World Bank Group, researchers found that 103 countries have laws that may hinder women's economic opportunities. The laws, which range from restricting the property rights of women in the Phillipines to not paying for maternity leave in Papua New Guinea, account for disparities in income, and affect the way women make decisions about whether to enter the workforce.

"In practice, there's less women in the private sector and [less] entrepreneurs," says Rita Ramalho, the EAU's Program Manager. "We want to see what regulations play a role in that."

According to Ramalho's team, there are a lot. Legally, women can be restricted by:

• Needing permission from men to travel outside the home
• Needing a male witness to sign contracts or conduct business transactions
• Being barred from deciding on property and finance decisions if men are the only legally recognized heads of the household
• Getting married. Marriage can restrict a woman's rights to property, business transactions, and sometimes also results in her paying higher taxes.

The good news is that while gender disparity still exists on the books, many countries are amending their laws. The most active reformer has been Kenya, who amended its constitution last year to grant women equal inheritance property rights and the ability to confer citizenship onto their children. These small changes allow women greater autonomy over their property, their children's future, and the ability to decide with greater independence.

Keep up with Rita's blog to find out more about the World Bank's research on women.

*Above: A Kenyan woman learns to sew through a World Relief microfinance initiative. Courtesy world-relief.org
Top: American women assemble a B-17 bomber during World War II on an air base in Long Beach, California. Courtesy Library of Congress
Effie-Michelle Metallidis is a guest student blogger for the Women and Public Policy Program and Master in Public Policy first-year student at Harvard Kennedy School.