Because it’s 2016

Gender diversity: an economic imperative

Gender diversity in corporate leadership positions is an economic imperative. | Getty

Successful Lebanese businesswomen are usually extra busy at the beginning of March, four of them tell Executive. It’s not the imminent close of the first quarter demanding increased attention, but rather requests from media outlets paying their annual homage to International Women’s Day on March 8. Frankly, this kind of coverage is demeaning. Equality is not advanced by speaking to female business leaders once a year and asking questions like: “How did you do it?” or “Is it hard being a woman and being successful in business?” If anything, this type of reporting only helps to reinforce in the audience’s mind the notion that a successful businesswoman is somehow an anomaly. Equality means we’re not surprised a woman is successful in business, just as we’re not surprised when men succeed in business. This is even more true because of the cyclical nature of it. Every other month of the year, the voice of female businesswomen is nearly inaudible in the local press.

Human capital – meaning the talent of women and men – is one of Lebanon’s greatest assets. We can’t maximize our economy’s earning potential by undervaluing or ignoring roughly 50 percent of our possible workforce. Providing women the same career opportunities as men is not only a goal for reaching gender equality in the workplace, it’s an economic imperative. And for those who are unconvinced by equality as a moral argument, there is an increasing body of research suggesting that gender diversity gives corporate performance a boost.

A study by the US-based Peterson Institute for International Economics released in February 2016 suggests “that the payoffs of policies that facilitate women rising through the corporate ranks more broadly [than only having seats on corporate boards] could be significant.” Unlike some earlier research, the Peterson study did not find significant positive or negative correlations between a gender diverse board and company performance, although the authors note “the statistical analysis may be too crude to detect such effects.” The research looked at 21,980 companies across 91 countries. One limitation is that it only assessed performance in 2014, but, as noted, the study found statistically significant correlations between gender diversity in corporate leadership and better performance when compared with peer companies lacking gender diversity in corporate leadership positions. And the study’s authors elaborate, “The estimated magnitudes of these correlations are not small: For profitable firms, a move from no female leaders to 30 percent representation is associated with a 15 percent increase in the net revenue margin.” Based on these findings, the study’s authors highlight “the importance of creating a pipeline of female managers and not simply getting women to the very top.”

These findings have important implications globally, of course, but particularly for Lebanon and the wider Middle East and North Africa region. According to a 2016 report by the UN’s International Labour Organization, “The MENA region has the lowest representation globally for women in management and leadership positions [within corporations].” Region-wide, the study found, women’s formal labor force participation is only 27 percent, compared to 77 percent for men. Women in the region, however, tend to leave the labor force in their early 30s, which the study notes is “a time when women are experienced enough to assume higher positions and more responsibilities at work.” For those who continue working, structural barriers to advancement remain, in part because “within the corporate world, women tend to manage mainly the support functions such as human resources, public relations and other similar functions. Women in these functions may climb up the ladder, yet such experience rarely allows them to move along the central pathways that lead to the very top of corporations.”

Lebanese corporates must recognize gender diversity as a pro-growth strategic policy. Internal corporate mentorship programs are one way to invest in female employees and expose them to the experience needed to rise through a company’s ranks. There are also potential legislative ways to increase the number of women in corporate leadership positions, and various women’s rights organizations are pushing hard on that track, but we don’t have to wait for legislation alone. Corporations can act today. One way to encourage them is to normalize the idea of women as business leaders. Here, the media have an obvious role to play. Local NGO Women in Front produced a useful directory of contact information for female business leaders that journalists can use to find sources to quote on a regular basis. The directory is available free – in English and Arabic – on Women in Front’s website. The media should give businesswomen the same attention that they routinely award to men. By covering their stories instead of calling them once a year for a courtesy interview, media must set signs for corporations and lawmakers to follow.

Executive wrote this article based on a 90-minute conversation with Asmahan Zein, president of the Lebanese League for Women in Business and general manager of InfoFort, a data management company; Joelle Abou Farhat Rizkallah, co-founder of Women in Front and general manager of Jô, an advertising company; Lama Oueijan, a senior specialist in the regional office for Arab states with the International Labour Organization; and Rana Ghandour Salhab, a partner with Deloitte.

Matt Nash

Matt is Executive's Economics & Policy Editor. He has been reporting on Lebanon since 2007 with a focus on oil and gas, policy and legal matters.

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