According to the World Bank, female-run enterprises are steadily growing all over the world, contributing to household incomes and the growth of national economies.
Unfortunately, the number of women entrepreneurs is significantly lower than that of men.
CNN found out that the number of women running Fortune 500 companies has hit an all-time record of 37. However, that’s still only made for 7.4% of these top companies.
What are the reasons behind this gap?
The first obstacle is described by the metaphor called “Glass Ceiling”. This metaphor is used to represent an invisible societal barrier that keeps women or members of minority groups from achieving the highest positions in business, politics, and organisations.
The second barrier is the “Glass Cliff” which describes a phenomenon where high-level women are often promoted at companies during a time of crisis.
This term was coined in 2005 thanks to Michelle Ryan and Alexander Haslam, researchers from the University of Exeter, which aimed to disprove the Times statements in 2003. The Times, in 2003, had suggested that women leaders have a negative impact on company performance.
Ryan and Haslam looked at the 100 companies listed on the London Stock Exchange (the FTSE 100 index) to see what happened at those firms before and after board members were brought on board. Their findings were that during periods of overall stock market decline, firms that have experienced a consistently bad performance in the preceding five months decided to brought women to their boards.
Cook and Christy Glass at Utah State University followed up with research examining Fortune 500 companies over a 15-year period that reported similar findings.
“When firms are doing poorly, the really qualified white male candidates say, ‘I don’t want to step into this’. Women and minorities might feel like this might be their only shot, so they need to go ahead and take it.”
Are there any hopes for the future?
It seems that a model to follow already exists.
According to the Global Gender Gap Report 2021, Iceland is the first ranking country out of 156 countries for gender parity.
Iceland was the first country in the world to elect a female Head of State, Vigdís Finnbogatóttir in 1980. They also have a high rate of women’s participation in the labour market (77.6%). In contrast, approximately 50% of working-age women are part of the labour force globally compared to 75% of the men.
What are they doing differently from other countries?
During the last decade, the country has passed, among others, laws to ensure gender equality. For example, they approved a law to secure paid paternity leave for 3 months that is a step into eliminated the assumption that child-rearing responsibilities fall on women.
Iceland has also sought gender balance on boards by making companies have a minimum of 40% of women or men on their boards since 2010.
This blog contribution was made by Eleonora Papini.
Eleonora is originally from Italy, she is passionate about human psychology, sustainable development and international cooperation. Eleonora works as a Project Implementation Officer in a European project about urban sustainable development solutions aimed at valuing the young and female entrepreneurship industry.
In 2021 became also a Data Analyst for the LMF Network and content creator for their blog.
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The LMFnetwork is a global social enterprise (not for profit) focused on empowering, enabling & educating womxn and marginalised groups into tech, entrepreneurship & digital. We specialise in designing and delivering accessible programmes and supporting a global community. We’ve gone from a brunch club to a social good brand based on what the community wanted. We are a real community run by real people.
- Female Entrepreneurship Resource Point — Introduction and Module 1: Why Gender Matters, Worldbank
- Beyond the Glass ceiling: why businesses need women at the top. ILO, 2019.
- The number of female CEOs is increasing — but here are the big problems standing in their way. By Julia Boorstin, Cnbc, 2020.
- Female Fortune 500 CEOs reach an all-time high, but it’s still a small percentage. By Alisha Ebrahimji, CNN, 2020.
- The Glass Cliff: Evidence that Women are Over-Represented in Precarious Leadership Positions. By Michelle K. Ryan and S. Alexander Haslam. British Journal of Management, 2005.
- Women on board: help or hindrance? By Elizabeth Judge. The Times, 2003.
- Above the glass ceiling: when are women and racial/ethnic minorities promoted CEO? By Alison Cook and Christy Glass. Strategic Management Journal, 2013.
- Global Gender Gap Report. World Economic Forum, 2021.
- Why is Iceland the world’s global leader in gender equality? WPL.2014.