Closing the gender gap

C&I Issue 2, 2012

You’ve come a long way, baby,’ magazine adverts for a cigarette aimed at women proclaimed in the 1970s. Feminists of the day were sceptical, as their counterparts still were 30 years later. Only over the past few years have women made any significant progress in their climb to the highest rungs of the corporate ladder, and many would doubt whether the adjective significant is the right one.

According to the Geneva-based World Economic Forum’s survey of 600 human resources (HR) managers worldwide, Measuring the corporate gender gap, only 5% of all corporate chief executives worldwide are female. And they often do not receive the same credit or the same pay as their male counterparts.

Even in the US, which has traditionally led the modest list of women top managers, progress appears to have stalled, say market research groups monitoring gender equality. In 2010, women held slightly more than 14% (in absolute numbers, 12) of the chief executive positions at Fortune 500 companies and accounted for less than 8% of the top earners. Among Standard & Poor’s 100 leading players, women held 18% of the directorships and just under 8% of the top-paying jobs.

Numbers quoted by Google chief operating officer Sheryl Sandberg in a widely-watched video on the TED internet platform, peg representation of women in the top tier of the international workforce at only 15-16% in 2011. Figures for Europe vary widely, with industrial powerhouse Germany generally ranking near bottom.

More young women than ever now leave universities with chemistry degrees, and their representation in research labs is often formidable; however, female ceos in the chemical industry are still rare. DuPont ceo Ellen Kullman – who ranked fourth on Fortune magazine’s list of North America’s top 50 most powerful women in business in 2011 – and Stephanie Burns, ceo of Dow Corning are frequently mentioned exceptions.

But women’s often superior academic performance and simple demographics –  an ageing and a shrinking worldwide workforce – as well as quotas for senior management, or the threat of such, suggest potential for a reversal of the trend. The chemical industry could face ‘a serious talent crisis,’ due not only to the imminent retirement of ageing executives but also to a decline in the number of students opting for careers in science, consultancy firm Egon Zehnder noted at its Chemical Forum 2010.

‘Equal chances for women and men are not only a matter of fairness and integrity, but also an economic necessity that companies cannot afford to do without in view of demographic trends,’ stresses Bayer’s human resources chief Horst-Uwe Groh.

If this conservative industry takes such messages to heart, the second decade of the 21st century could see more and more women handed the keys to the chemical executive boardroom. It is doubtful, however, that their presence will simply make the surroundings ‘more colourful,’ to quote a much-criticised remark by retiring Deutsche Bank chief executive Josef Ackermann.

Breaking the glass ceiling

National governments are gradually taking crucial steps to pave the way. In Europe, undisputed gender equality leader Norway a decade ago mandated a 40% quota for female directors at large companies. If reports can be believed, the target has been achieved or even exceeded. Spain is aiming for a similar target by 2015.

In June 2011, Belgium’s parliament voted to force state-owned businesses and stock market-listed firms to award 30% of managing board seats to women. Large companies have five years to comply, SMEs eight years. As 2012 started, the parliament of the Netherlands was poised to debate similar rules. Rotterdam-based petrochemicals giant LyondellBasell, which in 2011 appointed Karyn Ovelmen as chief financial officer, is a step ahead of the game.

By 2017, at least 40% of managing and supervisory board members at companies listed on France’s CAC-40 stock exchange and all other firms with sales of more than €50m and at least 500 employees must be female. According to the French employers’ association Mouvement des Entreprises de France (Medef), the share of women executives at the country’s 40 leading companies now hovers around 15%. Taking the 500 largest companies as a base, the numbers drop to 8%.

European Union justice commissioner Viviane Reding has urged countries to establish at least voluntary targets for female representation – as was done in the UK and Germany in 2011. While the UK is seen as making sluggish progress, Germany – coming from behind – may be catching up. In 2011, a dismal 3.7% of senior executive jobs were held by women, and women held only 5% of the non-executive supervisory board positions, but there is a strong movement for change.

In 2011, companies listed in Germany’s blue-chip DAX stock index pledged to ‘work toward’ a voluntary 30% target for women in senior management up to 2018, parrying a thrust by federal labour minister Ursula von der Leyen for a statutory quota. The outspoken mother of six has been at the forefront of battles for gender equality. ‘We have put up with enough lip service,’ she says. ‘We can’t afford to waste another 10 years.’

Germany’s manufacturing sector knows something about threatened quotas. The spectre of mandatory CO2 emissions limits, for example, made chemical companies pioneers in fulfilling ambitious but non-binding targets and successfully marketing the technology abroad. The same principle evidently is being applied to hiring female executives – a flurry of appointments followed just days after the DAX pact. In Germany and elsewhere, head hunters are being deluged with enquiries about qualified women.

Leading the way

Asked at a press conference five years ago whether BASF’s managing board was too German, too white and too male, then-ceo Jürgen Hambrecht conceded that the world’s largest chemical producer might have diversity issues. However, it only named the first woman to its board in 2011.

Margret Suckale, a 57-year-old lawyer, achieved nationwide recognition while on the board of the German railway Deutsche Bahn, where she was instrumental in resolving an engine drivers’ strike. At BASF, where there has been no strike for 40 years, Suckale has board-level responsibility for HR; environment, health and safety; and the company’s integrated European sites. Before her board nomination, she served as BASF senior vice president, global HR executive management and development in Ludwigshafen.

BASF has pledged to increase the proportion of women in what it terms ‘solid-line’ German management to 15% by the end of 2020, from just below 10% in 2010. To encourage more women to apply for leadership positions and as a ‘clear investment in our future,’ the company has initiated schemes to help employees reconcile work and family commitments, including 80% part-time positions, flexible working conditions and childcare facilities.

In October 2010, Sandra Peterson was named ceo of Bayer CropScience after having served on the executive committee of Bayer HealthCare since 2005. The New York native is the first woman and the first American to run the German company’s nearly €7bn agriculture business. Like compatriots Ellen Kullman and Stephanie Burns, Peterson is credited with turning around ailing businesses.

Setting targets

Up to 2015, the Bayer group aims to ‘gradually’ increase the share of women in senior management from about 21% at present ‘toward a target of 30%’. Its goal for the supervisory board is 20%. Among its managers in Germany with academic degrees, the share of women was 40% in 2011 – up from only 17% five years earlier. This, the company explains, is because ‘more young women are now pursuing scientific or technical careers’.

In October 2011, consumer chemicals manufacturer Henkel joined the elite but growing group of companies with at least one female managing board member. Kathrin Menges, a senior vice president since 2005, has board level responsibility for HR. Henkel says women hold nearly 30% of managerial positions at the company. It also has a female supervisory board chief, Simone Bagel-Trah, a member of the majority shareholding family.

After announcing plans in February 2011 to ‘significantly increase’ the share of women managers, German chemicals firm Merck made two key appointments in December 2011. Friederike Rosch, 39, was named head of corporate accounting and Isabel De Paoli, 37, head of corporate strategy. Both appointments were effective 1 January 2012.

Rosch, who joined Merck’s legal department in 2005, supported the acquisition of biopharmaceuticals producer Serono. De Paoli began her career with the company in chemicals business development and transferred in 2009 to Merck-Serono as head of global strategic planning, oncology.

While Merck says it rejects the idea of a statutory quota, its goal is for women to hold 25-30% of high-level management positions by 2016. Women currently account for 43% of the workforce – in line with the German average – and ceo Karl-Ludwig Kley acknowledges that their representation at management level is ‘too low’.

While the US chemical industry has done its part to dispel the image of female executives as window dressing for the boardroom, it still has few in the ceo slot. Most female managers at international chemical companies also are not chemists. Burns, who earned a doctorate in organic chemistry from Iowa State University and did post-doc work in France, is an exception. Kullman has a BSc in mechanical engineering from Tufts University and a masters in management from Northwestern University.

In continental Europe, experience in an English-speaking environment seems to at least help women – and men – to get ahead. Business and law degrees are also useful. After finishing her law degree in Germany, Suckale earned an executive MBA at Northwestern University. Rosch studied law at the University of Wales, and Isabel De Paoli did a stint at Boston Consulting.

Some female managers have more unusual backgrounds. Peterson, the sole American currently running a European chemical company (from 2007 to 2010, another American, Sandra Beach Lin, was president of German-American plastics producer Ticona) holds a BA in government from Cornell and an MPA in applied economics from Princeton. Meanwhile, Henkel’s Menges once pursued a teaching career.

Many women who have successfully cracked the glass ceiling declare, at least publicly, that they never noticed it. Most equally dismiss the need for statutory quotas as a way for women to climb the corporate ladder – perhaps for fear of being falsely perceived as a token themselves. ‘A candidate’s qualification is the crucial factor,’ Suckale asserts.

Describing her path to the top at DuPont, Kullman often points to her willingness to take risks – an attribute female executives are sometimes deemed to lack. Both she and Burns also had powerful – male – mentors within their companies. In the corporate gender gap survey, the chemical industry ranked highest worldwide in its support of mentorship and training initiatives.

Although company crèches are appreciated by parents of both sexes, some female managers say networking and mentoring programmes are more helpful for getting ahead. Along with gender-anonymous application procedures, Bayer has mentoring and coaching networks for women. ‘Mixed networks are even more important,’ Suckale contends. BASF also has a ‘structured’ senior executive development programme to identify the ‘most promising’ talents.

Head hunter Christine Stimpel and McKinsey partner Claudia Nemat, with the help of Peterson – a former McKinsey management consultant –  founded a German offshoot of the Women Corporate Directors network to encourage the appointment of women to supervisory board positions.

Female ‘ambition’ gap

What obstacles stand in the way of women on their march to the top? Google’s Sandburg points to the ‘female ambition gap’ that leads women to take themselves out of the running years before they decide to have a family. The World Economic Forum’s survey found a patriarchal corporate culture and the lack of role models to be major drawbacks.

It is certainly too early to know what would look or feel different if more women were at the helm of leading companies, in chemicals or other industries. ‘Women tend to be more intuitive, which means to me that they often can tailor their management style to a particular employee’s needs,’ one retired chemical executive comments. Others contend that women are more innovative and open to change.

Interestingly, in conjunction with its selection of the 100 Most Powerful Women in 2010, Forbes looked at the stock market performance of the 26 publicly traded companies headed by women and found that as a group they outperformed the overall market – which was led by companies dominated by male ceos – by 28% and at the same time topped their respective industries by 15%.

This seems to support the theory circulating in the UK and elsewhere that if more women had been running the show, the 2008 stock market crash would not have happened.

Women making a difference in the chemical sector

Only a few years ago, the lack of women in senior management in any industry, would not have been a headline grabbing topic.  The fact that an increasing number of governments and companies are doing something about this untapped resource is encouraging, says Joanne Lyall.

According to the UKRC, UK’s lead organisation for the provision of advice, services and policy consultation regarding the under-representation of women in science, engineering, technology and the built environment (SET), in the UK, in 2008 women held only 9% of board directorships in SET FTSE companies, and exclusively male boards still existed in 35% of SET companies.  At the current rate of increase, in 2030 women will hold 18% of directorships in the UK FTSE 100 companies in the SET sectors. 

SCI, a 130 year-old learned society, has embraced diversity, appointing its first woman honorary president in 2009,  Stephanie Burns of Dow Corning, and its first woman executive director in 2010.  Women members of SCI, who represent 22% of the total membership, value mentoring by a senior, experienced man or woman, who can provide inspiration, advice and introductions at senior level.   A broad peer support network is also helpful if women are in the minority in their organisation.  We try to provide inspiration to early career stage women through case studies of women in various stages of their career in a wide variety of career paths based on chemical and related sciences.  

If we can inspire and nurture women with the right talents to contribute a new perspective and make a difference at board level then I hope that in another 20 years, articles about gender imbalance will no longer be needed and the contribution of the chemical sector to society will be enhanced.

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