By Carolina Carrasco and Maria Teresa Villanueva
Maria Teresa Villanueva leads the development and implementation of Multilateral Investment Fund projects to help women start and grow their businesses, and provide them access to finance, training, and markets. She holds a Master's degree in development management from American University.
If women make up half of the population and almost half of professionals in Latin America and the Caribbean, why are not more women represented in senior management positions in businesses in the region? A study recently published by McKinsey & Co., Women in the Workplace 2015, estimated that in the United States, based on developments in the last three years, it will take 100 years before we have gender parity at the "C" levels--named for their acronyms in English (CIO, CFO, CEO)--which are the highest-level executive positions. The outlook for Latin America and the Caribbean appears to be even worse, given that its current share of women in management positions is only 6.4%, or one-third of the 19 percent share in the United States.
Meanwhile, studies are showing that greater diversity in office teams leads to greater productivity and sustainability in businesses, which substantiates the need for policies and programs to help accelerate this process. Since Latin America and the Caribbean is faced with an imminent economic slowdown, the general participation of women in the workforce and particularly in senior management positions becomes imperative and increasingly relevant for companies and governments in the region.
A report by the Inter-American Development Bank about "Best Practices and Global Experiences to Increase Women in Leadership within the Chilean Private Sector", released recently in Santiago, Chile, distinguishes three different levels on which successful programs promoting women's leadership can operate:
Macro level. Major actors in a country can promote gender equality. Governments can implement measures that promote the economic and social equality of men and women. Measures such as standards regarding transparency in corporate governance have been linked to greater growth rates of equality. Also beneficial is support by the private sector for the implementation of specific goals--voluntary or involuntary--for further participation of women in senior management.
Meso level. Companies can act to build more inclusive and diverse leadership teams. The success of these actions depends heavily on several factors: (1) demonstrated commitment by business leaders to diversity and concrete actions that promote female talent; (2) implementation of specific programs that promote recognition of the value of diversity and cultivate internal talent for equitable access to leadership positions; (3) the establishment and constant monitoring of metrics, not only related to management of talent and career development, but also to the business case for gender equality, specifically regarding productivity, profitability, and market share; and (4) transparency in the selection process for senior managers and in the criteria used for hiring.
Micro level. Women can act to overcome cultural or personal barriers to upward mobility in their careers. At this level, the following are relevant: (1) training in "hard" subjects such as finance, risk management, and corporate governance; (2) participation in programs that provide mentoring, coaching, and sponsoring, as well as participation in traditional networks of contacts; (3) visibility of women candidates and leaders who serve as role models for future generations.
More Women, More Development in Chile
Simultaneous progress on all of these three levels can be very difficult to coordinate. Chile--where the share of women in management positions is 5.6% (19 women directors of a total 331 board positions)--has become a pioneer in Latin America and the Caribbean in promoting gender diversity through public-private partnerships. On October 26, the Chilean public and private sector announced a joint initiative, "More Women, More Development," which establishes the following specific objectives:
- Increase the visibility of business leaders who are committed to equal opportunities for women
- Develop public policies that promote the entry of more women into the labor market
- Implement a series of voluntary actions that companies can adopt to remove barriers and encourage the promotion of women to senior management positions
- Promote studies that show the correlation between management teams that are evenly composed of men and women, and the improved financial, environmental, and social performance of their companies
- Strengthen national and international networks that contribute to the acceleration of this process
The announcement of this public-private partnership is a major step toward promoting greater gender diversity in management teams in the Chilean private sector. We hope it will have concrete results in coming years, and become a benchmark for other countries in Latin America and Caribbean.
Carolina Carrasco, a gender specialist at the Multilateral Investment Fund in Chile, leads projects that promote the development of women-led businesses. She has a degree in commercial engineering from the Pontificial Catholic University of Valparaiso, Chile.
From the Multilateral Investment Fund Trends blog.