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Monday, November 07, 2011
Perspectives

Latin America: Female Boardroom Blues

Latin America's businesswomen struggle to break through the glass ceiling.
Yolanda Auza Gomez, President of Unisys de Colombia and General Manager of Unisys LACSA
Blanca Treviño, President and CEO of Softtek

LBC SPECIAL
Knowledge@Wharton   

Among the documents Blanca Treviño signed when she took her first job out of university in the early 1980s in
Mexico was a resignation letter. The letter would be held in her file until the day she tied the knot. "If you got married, the management would decide ... whether or not you would be forced to resign," Treviño says. "It wasn't just me or this company. It was normal for a company to make all women submit the letter when they were hired."

Treviño left the company a few months before getting married. But 30 years later, she recalls the bygone practice as a powerful example of the barriers professional women have faced in Latin America. "A lot has changed and I personally have been very fortunate," notes Treviño, now CEO of Softtek, a Monterrey, Mexico-based privately held IT firm with 6,000 employees in offices across Latin America, the U.S. and Europe. "There are more opportunities now than there were then."

She has a point -- roughly 100 million women make up more than half of the region's workforce, and female politicians have risen to the highest offices from Central America to the Southern Cone. But little of that opportunity has bubbled up to corporate boardrooms and the corner executive offices. As reams of research and statistics suggest, Latin America lags other regions in corporate gender equality. With few exceptions -- such as Treviño -- Latin businesswomen are beset with barriers that keep them out of top executive management.

"From a societal and cultural perspective in Latin America, it's still very difficult for a woman to have professional success. Latin American is tough on ... how it perceives the role of a woman," Treviño says. "You're still expected to be much more the mother at home than the executive."

FEW AND FAR BETWEEN

When Mercer Human Resource Consulting conducted a global corporate study in 2006, it found that Latin American companies had fewer women in senior posts than any other region in the world. More recently, a similar analysis in 2010 of the percentage of women on boards of directors by Catalyst, a New York-based nonprofit that advocates greater corporate roles for women, ranked Mexico 27th with 6.8 percent, Brazil 32nd with 5.1 percent and Chile 38th with 1.9 percent.

What's more, the region's largest companies are not setting the examples that they could be. Five of the region's 10 largest companies have no women on their boards, while women make up only 9 percent of the remaining five, according to America Economia magazine. None of the latter has a female chief executive officer or board chair, and most have no more than two female board members. The exception is Wal-Mart Mexico, which has seven female executives sitting on its 13-member board.

Latin America is not alone. In the U.S., for example, just 2.6 percent of boards were chaired by women, according to a 2011 Catalyst study, and female corporate board representation has stagnated at just below 16 percent for the last five years. In the United Kingdom, the proportion of women on FTSE 350 boards has increased slowly over the past 10 years, from 5 percent to 9 percent. Nearly half of the companies listed on the index have no female board members, according to new research from consultants at Deloitte.

But change is afoot, thanks in large part to European legislatures. Since 2003, seven European countries have introduced laws requiring publicly listed companies to have a minimum of female representation on their boards. For instance, in 2010, France passed a law requiring a minimum of 20 percent female representation on boards of state-owned or listed companies by 2014. The percentage increases to 40 percent in 2017. French companies have already responded. Between 2009 and 2011, female representation on boards of the benchmark CAC40 index nearly doubled, reaching 20.6 percent, according to the Global Summit of Women, a Washington, D.C.-based research group.Earlier this year, Malaysia became the first country outside Europe to establish such a system.

"You're seeing the [number] of women on boards change at a rate never seen before," according to Irene Natividad, president of the Global Summit of Women. "It may be mostly Europe, but it's absolutely going to affect corporate governance" in other countries.

In many circles, it's now accepted that having women on boards and in executive posts simply makes good business sense. Such views are bolstered by studies like the one in 2007 conducted by EVA, a think tank financed by Finland's business community. The EVA study found that companies led by female CEOs average profitability of 14 percent, compared to 12.2 percent for firms led by men. Likewise, a 2010 study by U.S. consulting firm McKinsey reported that European companies with greater gender diversity in their leadership ranks posted better returns on investment, earnings and stock price growth than those that didn't.

SLOW TO ADAPT

But before Latin America can follow examples being set elsewhere, the region has a lot of cultural baggage to lose. Latin America's machismo culture is said to date back to the Spanish and Portuguese conquistadors who colonized the region five centuries ago. Chauvinism has kept women out of prominent business roles and in the home as a wife, mother and family caretaker. While the perpetuation of traditional gender roles is not unique -- indeed, some scholars suggest the Arabic influence on Spain and Portugal led to Latin America's male-dominated culture -- the region has been slow to adapt.

Of course, before Latin American women could even begin dreaming of rising up corporate ladders, they needed to get themselves into the workforce. According to the United Nations, 32 percent of women in Latin America worked in 1990 -- less than the percentage of U.S. women in the labor force back in the conservative 1950s, when barriers persisted and popular magazine Housekeeping Monthly published "The Good Wife's Guide," which advised women to have dinner ready and touch up their makeup before their husbands got home.

In any era, cultural norms do indeed have a direct impact on the prospects for women in the corporate world, but they can be torn down, notes Susan Vinnicombe, director of the International Centre for Women Leaders at Cranfield University in the United Kingdom. "The cultural context makes an enormous difference," she says. "If you looked ... [in the past at] the role of women in northern Europe versus southern Europe, in countries like Italy and Spain, everyone kind of laughed [at the idea of women attaining executive-level jobs]. But now those are the countries bringing [boardroom] quotas. Those are the countries on the move."

Can the same be said of Latin America? After all, by 2008, 53 percent of Latin American women had entered the workplace. "This massive influx of women into the labor market has significantly improved countries' ability to generate wealth, enhanced the well-being of households and reduced poverty," concluded the United Nations in 2009 following a study of women in the workforce in Latin America.

IN THE POLITICAL ARENA

In political circles, women have fared better. In 2010, Brazil's Dilma Rousseff became the fifth female politician to be elected head of state in Latin America since 1999, when Mireya Moscoso became president of Panama. Women also represent 46.5 percent of political party members in the region.

Such political participation may be tied to legislative action. Beginning with Argentina in 1991, Latin American countries have established quotas for female representation in politics. Eleven countries have passed legislation mandating a minimum percentage of women in elected or appointed offices. In three other countries, political parties have voluntarily committed to quotas. Yet, unlike Europe, no country in the region is considering the introduction of quotas for corporate boards.

In fact, laws may be holding women back. A study by the World Bank found that in several Latin American countries, laws intended to promote gender equality prevented women from entering the workforce or moving up the corporate ladder. Of the 20 countries and territories in Latin America and the Caribbean included in the study, only Brazil and Puerto Rico allowed parents to write off childcare costs on tax returns. And several countries set the legal retirement age for women years younger than the age for men. "The retirement age is important for women who may be in the prime of their careers -- and in a position to take a post as an executive and on a board," notes Rita Ramalho, a World Bank program manager and the study's lead author.

As for paid maternity leave policies, Venezuela, Brazil and Chile each grant at least 120 days of mandatory paid leave. No countries, however, have similar policies for fathers. Venezuela's paternity leave policy is the most progressive, with a minimum of 14 days paid leave. Two of every three countries surveyed by the World Bank required two or fewer days of mandatory paid paternity leave.

Ramalho says the discrepancy between paternal and maternal leave policies is important because it could influence an employer's hiring decision. "If an employer knows it doesn't have to give a father time off, it could be more likely to hire a man" instead of a woman applying for the same post, she points out. A more equitable practice is parental leave, which can be taken by either parent. No Latin American country assessed by the World Bank has official policies for such parental leave.

The study also found that tough laws barring discrimination don't exist, nor do laws against sexual harassment. According to a 2010 survey of female corporate leaders published in the International Journal of Management and Marketing Research, 65 percent of Latin American women stated that they faced serious obstacles in their professional lives, compared with 28 percent in the U.S. One of the major issues was discrimination. Some 61 percent of female executives in Latin America polled said they faced discrimination, compared with 21 percent among their North American counterparts.

SINGLE AND SINGLED OUT

But how are Latin America's women able to strike a balance between work and family? Not easily, according to one up-and-coming sales manager (who requested anonymity) at a Brazilian construction materials firm. She says she feels pressured to work harder than her male co-workers to get ahead. "It's not that you feel singled out as a woman, but it's more the atmosphere. You feel like you have a disadvantage because you're a woman."

The sales manager was recently promoted from sales representative to regional supervisor overseeing accounts in a handful of countries. She recalls how the pressure grew after her promotion -- as did the realization that she would have to choose between her career and raising children. "I don't think, in my position, that I could take time off to have children and still be able to get to the position where I want to be with my career," she says. On the road more than half the week, "the idea of even having a relationship is kind of a joke. There's no time," she says.

For Latinas, in countries renowned for their devotion to family life, the choice between children and a career is particularly difficult. In the case of Softtek's Treviño, she recalls receiving complaints from her daughter's kindergarten teacher about her work-life decisions. "She would tell me that my daughter was making up stories about her mother [traveling on business trips]," even though the little girl was telling the truth, Treviño says. "It was inconceivable for [teachers] that a woman with a child in kindergarten would be working in that capacity."

A 2005 report from the Inter-American Dialogue and Simmons School of Management in Boston, Mass., shed light on how deep those tensions run, noting that Colombian and Chilean businesswomen, in particular, said they would not jeopardize family life for a chance to climb the corporate ladder, and 60 percent of the Argentines polled considered family just as, if not more, important than work.

"There was definitely a discussion I had with friends when we talked about having a career or a family," according to Yolanda Auza, Colombia-based general manager of Latin America for IT multinational Unisys. Auza, who was named one of the top …businesswomen in Latin America for two consecutive years by weekly online journal Latin Business Chronicle, is single. "For me, it just turned out that way. It wasn't because I chose my career over having a family. I value my family and I try to instill that in the workplace."

Auza says an important step in changing attitudes in Latin America is instilling confidence in the next generation of female executives. She has helped launch one of a growing number of mentoring programs through the Colombian chapter of Women Corporate Directors International, a global club founded by executive recruiters Heidrick & Struggles, consultancy KPMG and others. Under the program, board members and executives -- men and women -- coach younger businesswomen, helping them to raise their profiles and responsibilities in the business world.

"I tell all my employees and the people around me that they should and can have a family and have that balance between their jobs and their work," Auza notes. "It's important that we [in Latin America] start to realize this."

'A CONFIDENCE CEILING'

As successful as mentoring programs can be in encouraging more women to pursue corporate careers, "it takes a long time for them to gain traction," Cranfield's Vinnicombe points out.

Treviño, whose daughters are now 18 and 22, fears that years of slow change in Latin cultures have detrimentally affected young women. "Do we suffer from a glass ceiling in Latin America? Probably. But I think that the bigger issue is that there's a 'confidence ceiling,'" Treviño says. "Young women don't believe that they can reach upper management. They don't think it's possible."

Apart from quotas, what can shatter that ceiling? Some observers say executive leadership dedicated to increasing gender diversity in the workplace can go a long way. In many respects, it comes down to the vision of a CEO, notes Natividad of Global Summit of Women. "Regardless of the other factors, the most effective [driver] is having a CEO committed to gender diversity," she says. "It's the one ingredient that is critical."

Providing a ray of hope is Brazil, with its many large state-owned enterprises that have such corporate and political leaders. During her presidential campaign, President Rousseff paraphrased Barack Obama's rallying cry with the slogan "Yes, women can." While she has yet to make a push for quotas on the boards of state-owned companies, she has put gender equality on her agenda.

"In my country, women have been fundamental in overcoming social inequalities," she said in September in a speech to the United Nations General Assembly. "Mothers play a central role in our income distribution programs. It is they who manage the resources that allow families to invest in the health and education of their children. Yet my country, like every country in the world, still has much work ahead of it when it comes to empowering women."

Giving a stage to the idea of empowering women is a critical step in changing attitudes. Natividad recently attended a global meeting about corporate diversity and found Brazilian women to be among the most optimistic. "There was real enthusiasm. They were talking about these places [where] 40 percent of boards [are comprised of] women and they wanted that," Natividad recalls. "They're motivated because of the election and the words of a female president. That is very encouraging."

Republished with permission from http://www.knowledge.wharton.upenn.edu -- the online research and business analysis journal of the 
Wharton School of the University of Pennsylvania. 

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