Underpayment and greater risk for dismissal of female CEOs

It's been said a lot that there are too few female CEOs, but sometimes women have good reasons not to become a CEO. Because there is still some evidence that female CEOs are underpaid and the chances of getting fired are much higher than for male CEOs.

Female and male CEOs have very similar backgrounds. They have almost the same age, life in the same area as the headquarters of the company, have few international experience and reached rarely the combi-function CEO and president. But there are still some differences between the two genders. The biggest difference is the remuneration. Female CEOs are still underpaid compared to their male colleagues. This gap still remains, although it is getting smaller slowly. Female CEOs only earned 80 cent per dollar compared to the male CEOs, this is evidenced out of a research of the American Ministry of Labour. A wage survey of The Wall Street Journal did research to the remuneration of 300 CEOs of listed companies. The result was that only 8 out of the 14 female CEOs had a wage above the median. The wage of the 6 other female CEOs was below the median.

The reason of this gap is due to a negotiation gap between women and men. Women are afraid to ask what they want, “Nice girls don’t negotiate”. This gender bias will also be there in the negotiation phase and this creates some psychological barriers. There is a social stigma against women who ask for more. Women are expected to be nice, sweet and kind. But when they ask for more remuneration or better circumstances in the negotiation phase, they will be seen as the unfriendly and rude person.

Next to the fact of the underpayment of the female CEOs, there are still more chances of getting fired. Because women get riskier responsibilities as a CEO and have thus more chances of failing. Studies of Europe and US show that female stick only half the time in the CEO position than men and that female CEOs have 50% more changes to get fired.

17% of the Belgian listed companies have one or more females in the board of directors, which should be 30% at the end of next year. Still, Europe wants to put the target at 40% by 2020, the magic year in which Europe hopes that everything will change. The Belgian female CEOs in the listed companies give, let’s say, a distorted picture. There are only 136 listed companies in Belgium while there are almost 90.000 firms in Belgium. It wouldn’t be bad for every company, both listed and non-listed firms, to have at least one woman in the board of directors.

Our hopes are up that there are quite some changes coming and people will pay more attention to competences, team spirit, ethical issues and sustainability. And the good news is that everybody assumes that women are better at these soft skills than men will ever be.

So, at this end, we can only hope that female CEOs will rock the world some day!

“The less important fact about me, is the fact that I am a woman.”

Determining Factors for Female Success

“Women are breaking the glass ceiling”
“The wage gap between men and women is becoming smaller”
“Inequality between men and women on the work floor is decreasing”

Yes.

But… 

The extent to which this happens depends on a lot of different factors, it seems….

First of all, the geographic area you are active in plays an important role in the inequality of women versus men. The European Union is a worse student than the Unites States. In North America, the percentage of women in a leadership role is a lot higher than in the European Union.

The sector you are active in also plays an important role in the ability to break the glass ceiling. In some sectors the wage-gap is a lot wider than in others. The aviation sector is the worst player in this unfair game. In this sector, the difference in wages between men and women amount to a whopping 33%. Unfortunately, they are not the only ones. Clothing producers for example also have a wage difference of 25% between men and women in the same function.

Luckily, there are also some sectors that have a very small wage gap. The wood industry, specialised construction projects and the manufacturing of metals for example have a wage gap of only 1 or 2%. Good news however is the fact that in most sectors, the wage gap is declining compared to some years ago. Other research shows that the accounting sector and education sectors make women feel most supported, whereas marketing, advertising and media bear higher levels of discrimination. The same research confirmed that women working in engineering and manufacturing feel that their gender has been hindering their career. 

Of course some firms are better in helping their female staff smashing the glass ceiling than others, no matter what geographic area or industry they are in. The National Association for Females Exectuives (NAFE),  is a division of working mother magazine. It is one of the largest women’s professional associations in the United States. The NAFE Top Companies for Executive Women recognizes corporations that moved women into top executive positions and made room for a culture that identifies, promotes and nurtures successful women. In the 2015 top ten companies KPMG, EY, IBM, Procter & Gamble and Marriot International Appeared. The winner was Abbot. 

Equiped with this knowledge, ambitious women can be a little more selective in the companies, places and sectors they want to work in!

Bekaert changes gender of its board

Together with their good results, Bekaert announced some rather surprising news this week. Starting from May, four out of the six independent board members, will be women. The current members, four men and one woman, will be replaced by four new women and two men.

The new board members are the British Celia Baxter (Ford, KPMG, Tate & Lyle, Bunzl), the Belgian Christophe Jacobs van Merlen (Bain Capital), the German Pamela Knapp (Deutsche Bank, Siemens), the German Martina Merz (Chassis Brakes, Robert Bosch) en the Belgians Emilie van de Walle de Ghelcke en Henri-Jean Velge. With these new members, four of the independent directors will be women. Bekaert says that the new choices are a consequence of a thorough succession planning, aiming at a broad international, and professional representation.

It is a big change of the company because a few months ago, at the end of 2015, De Standaard published a study done by Standard Ethics, where they ranked the BEL20 companies according to the number of women in the board. Standard Ethics is the first independent European Sustainability rating agency. They assign Solicited Sustainability Ratings (SSR) to companies, sovereign issuers and green bonds. At that time, Bekaert was far below in the list, with only a representation of 14,29 % of women in the board. AB Inbev and Colruyt had the same percentage of women. The only company that that did worse was Ackermans & Van Haaren (11, 11% of women).

The three companies that had the most women in their board were Engie (57,89% of women), Proximus (50 %) and Delta Lloyd (40%). Now Bekaert will be definitely in the top three of the BEL20 regarding gender diversity of the board. The table below shows the percentage of gender composition in the twenty largest Belgian companies.

Standard Ethics made a comparison between the largest companies in France, Germany, Belgium and Italy. Belgium performs both extremely well and extremely poor. Our country has the first place (Engie) in the top 10 companies regarding gender diversification, but is also in the bottom 10 companies (Ackermans & Van Haaren).

It is clear that there are still large differences between companies, even in the BEL20. But, Bekaert’s announcement this week already made a big change. They will shift from being one of the bottom BEL20 companies in board diversification, to being one of the top companies in the list. Who knows, maybe Colruyt, AB Inbev and Ackermans & Van Haaren will follow this example, and Belgium will become the leader in gender diversification at board level!