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  Research Insights to Help Promote Women in Management 

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Is it harder to lead if you are female? Why aren't there more women in the C-suite? What will it take to shrink the gender pay gap? Research by IESE faculty analyzes these questions and more, marking progress on the path to gender equality. To commemorate International Women's Day and look beyond, here's a round-up of IESE's recent research on three salient themes:

1. The Gender Pay Gap

Currently, global estimates peg the pay gap between men and women at 23 percent. New research is homing in on some specific causes of that gap and, thus, remedies to narrow it.

"Even in the rarified air of corporate boardrooms, women are still earning less than men for the same work," Mireia Giné, professor of financial management, explains.

Focusing on executive pay, Giné and two co-authors found that women still receive significantly lower salaries and total compensation compared to men. Salary and compensation gaps were about 7 and 15 percent, respectively, even after controlling for tenure, job responsibilities and other factors.

C-suite executives don't just receive a salary; their compensation package typically includes equity incentives. These incentives carry potentially greater rewards, but also greater risk. Female executives were found to hold significantly lower equity incentive levels than their male counterparts, suggesting that they show, on average, a greater aversion to risk.

When the study turned its sights to the board of directors, results showed that more female representation resulted in smaller pay gaps. "For a firm with sample average proportion of female board members (9 percent), the gender pay gap in total compensation is approximately 5 percent lower than the 21 percent gap for firms with no females on the board," the authors assert.

In sum, even a single female board member could help level the playing field in terms of pay, the study indicates.
Read more in "Risky Business: Female Executives and the Pay Gap."

Working in parallel on this topic, using different research tools, Marta Elvira, professor in both the strategic management and managing people in organizations departments of IESE, and a co-author reach some similar conclusions, with a twist.

Analyzing data from more than a hundred high-technology manufacturing firms over time, the co-authors found that, the presence of female executives in top management positions helps reduce the gender pay gap.

They also found, contrary to some conventional wisdom, female executives are paid better when they are promoted from within, controlling for other variables. When there's more information on female executives' work histories, the gender pay gap is reduced.

It's also noteworthy that this research found no significant relationship between company profitability and gender, adding to the mounting evidence inconsistent with the so-called "theory of the glass cliff," from which women are metaphorically pushed off in struggling companies in crisis.
Read more in "The Inside Scoop on Reducing the Gender Gap."

2. Underrepresentation of Women on the Highest Rungs of Leadership

So, what is happening in Spain now? Several studies offer a picture of steady, if slow, progress.

Women's representation on the boards of Spain's 133 listed companies climbed by 15 percent during the year 2017. That increase brought the total to 258 female directors, who now occupy just over 19 percent of 1,347 board seats, says a 2018 study.

While significant ground was gained, the current situation still falls short of the EU's average of 25 percent and the 30 percent representation recommended by the Good Governance Code of Spain's National Securities Market Commission (CNMV) for the year 2020.

Homing in the 35 companies tracked by Spain's benchmark IBEX-35 index, and setting aside the remaining 98 listed companies, more progress is seen. In the elite group of 35, there are 106 female directors out of 448 total -- that's almost 24 percent. In the other listed companies, female representation comes to just about 17 percent.

This study was created under the academic direction of professor Nuria Chinchilla, holder of the Carmina Roca and Rafael-Pich Aguilera Women and Leadership Chair at IESE.
Read more in "Slow Progress for Women on Spanish Boards."

Meanwhile, IESE's Chair of Family-Owned Business offers a comparison of family and non-family businesses in Spain. This 2017 study finds family businesses showed slower progress than non-family businesses in increasing women's representation in boards. In 2004, women's representation on the boards of Spain's family businesses came to nearly 7 percent, while it was only 2 percent for non-family businesses. Fast forward to 2015 and women made up 15 percent of the family-business boards and 17 percent of the non-family-business boards.
Read more >

3. Promoting Work-Family Balance

Research finds the underrepresentation of women in top leadership positions is related to the rigidity of workplace policies. Modern policies should facilitate work-family conciliation.

For the book Women in Management Worldwide: Signs of Progress, IESE's Mireia Las Heras and co-author Marc Grau identify the main challenges at work in Spain. Two of them are:

1. The Spanish job market is inflexible: it isn't geared towards workers leaving and re-entering the workforce.

2. There is an organizational culture of "presenteeism," where companies value working long hours over flexibility and real productivity.

They conclude: Spain needs to do more to tap into the leadership potential of its highly educated female workforce. Managers should promote better work-family balance -- and enjoy its benefits themselves -- for a thriving, fair and diverse work environment for all.
Read more in "Management in Spain: Where Are the Women?"

Advice on how to achieve these goals can be found in chapters of the book The Work-Family Balance in Light of Globalization and Technology, edited by professors Las Heras, Chinchilla and Grau. Collected papers use a range of analytical approaches, with research across eight nations, to show that technology is fundamentally changing the way we spend time at work and with our families worldwide -- from entrepreneurs in Ethiopia to managers in Spain.

Much of this new research shows that balance in our globalized age is less about a traditional separation between work and home, and more about a skillful, flexible negotiation of these overlapping domains.
Read more in "Hanging in the Balance: Technology and the Blurring of Work-Family Boundaries."

Managers -- male and female -- play a key role in making this negotiation work. That is the conclusion of another paper by Las Heras et al., just published in 2018. Specifically, this research finds that family-supportive supervisor behavior -- i.e., having managers who take steps to help employees achieve a better work-family balance -- has a positive impact on motivation at work and "that this relationship holds across cultures."
Read more >

Back to the Spanish context, a survey of nearly 8,500 shines a light on some negative consequences when conciliation isn't possible.

According to this 2017 study prepared by Nuria Chinchilla, Esther Jiménez and Marc Grau, three out of four mothers in Spain feel they are discriminated against in the workplace. In addition, half of respondents said they have had fewer children than they wished and more than a quarter have postponed or renounced having children in favor of their careers.

More than half, 57 percent, say they had to give up a job that was incompatible with being a mother and 53 percent say motherhood has limited their career development. Twenty percent of respondents say they were not allowed to return to their jobs following maternity leave.
Read more in "One in Four Women Feels Forced to Choose Between Career and Motherhood in Spain."

Another hard look at the problem comes from another 2017 report by IESE's International Center for Work and Family which found that 87 percent of men and 86 percent of women in Spain claim to work in environments which systematically impede equal opportunities. Among the issues is that stubborn gender pay gap, which the study finds is wider for older working generations and shrinks to under 6 percent for those under 25.
Read more in "Gender Equality Remains Elusive in Spain."

Shrinking or eliminating the gender pay gap, helping with work-family balance, and increasing women's presence in top leadership positions are clearly interrelated issues. Tune in for next year's research to continue measuring the progress made.
This article is based on:  Research Insights to Help Promote Women in Management
Year:  2018
Language:  English