09 April 2021

Positive trend of gender balance in corporate boards

Although 2020 resulted in many negative trends and consequences for women and further deepened gender inequality, positive trends in gender balance in the corporate world are noticeable.

The last two years have marked a very turbulent and changing period for women in the corporate world. Thanks to competencies and expertise, there has been an increase in the number of employed women in the fields of education, health, and communication and media relations. In parallel, the share of women in senior positions as vice presidents of companies grew to 28% in 2020, compared to 23% five years earlier.

The Covid 19 pandemic has halted this growing trend due to a large number of layoffs in many sectors, wage cuts and deteriorating working conditions. Research shows that in this case, women found themselves on the front lines of the strike, with an emphasis on those who do not belong to the Aryan race.

Women are generally the ones who experience higher pay cuts, deteriorating working conditions, are abolished of certain benefits and, and according to statistics have received more layoffs than men in the past year. Furthermore, with the closure of schools and kindergartens and the introduction of online classes for working mothers, who in normal circumstances are challenged with balancing their private and business lives, the Covid-19 pandemic even worsened this challenge.

The Women in the Workplace survey, conducted for the sixth year in a row so far, has shown that men and women leave their jobs equally. Thanks to the challenges caused by the pandemic in all spheres of life, there is now a noticeable trend of increasing the number of women leaving their jobs for various reasons, but with generally the same consequence – a decline in the number of employed women will cause a decline in the number of women leaders.

Not all is that bad – more women on boards of directors

Yet, last year did bring some positive developments in terms of gender equality and efforts against gender and discrimination, at least in a corporate context. One of the positive trends from 2020 is the one with more women on boards of directors as was shown by the analysis of the best 25 American IPO companies in 2020. Only one company, which went public, had a board of directors composed exclusively of men.

Although this one company with only men in administrative positions is not a negligible phenomenon, one should bear in mind that not so long ago in 2018, out of a total of 25 American companies that went public, as many as 12 had boards of only male members.

Investors are looking for gender-balanced company boards

The initial public offering is a major milestone in any business that marks the transition from exclusively private to public ownership. Companies that offer and sell stocks in this way mainly finance further growth and progress.

By switching to IPO companies are obliged to a transparent business. Therefore, in addition to the quality and image of products and services, the corporate culture that cares for its employees, advocates for gender equality and non-discrimination and cares for the environment is important more than ever.

The youngest woman CEO became a billionaire

Thanks to going IPO with her company Bumble, Whitney Wolfe Herd recently became the youngest self-made billionaire in the world. Bumble is currently the number one dating app competitor to Tinder, where Whitney previously worked at.

Gender unbalanced companies are banned from going IPO?

Statistics show that women took 24% of the boards of directors of the most successful American IPO companies last year, while in 2019 the percentage was 22%, and in 2018 it was 11%.

The result of this growth, despite the general decline in the number of women employed in corporations last year, is largely due to the influence of global investors who show a growing interest in gender balance and want to avoid investing in shares of those companies that are not. Reasons for investors’ interests are based on the proven positive effects that diversity has on managing a company’s innovation and productivity.

Moreover, Nasdaq is pushing for new IPO listing rules that require companies to have at least one woman and one person who identifies themselves as a member of the LGBTQ + community in executive management positions. Also, it is noticeable that the number of women board members among companies that went public during 2019 and 2020 is increasing.

 

Lucia Ursić

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