Corporate Gender Inequality, the Meritocracy Fiction, and Other Related Points

The Wall Street Journal ran an article this past week (here) about a recent discussion Jack Welch had with a group of women executives.  While the article pointed out that only 3% of Fortune 500 companies have a female CEO, and female board membership is “similarly spare,” Mr. Welch apparently attributed this inequality to a lack of adequate production by women.  I say this because the article described him as being both dismissive of programs designed to increase workplace diversity, and confident that performance is rewarded:

Programs promoting diversity, mentorships and affinity groups may or may not be good, but they are not how women get ahead. "Over deliver," Mr. Welch advised. "Performance is it!"

The responses of some of the attendees reflected a different view:

"He showed no recognition that the culture shapes the performance metrics, and the culture is that of white men."

"While he seemed to acknowledge the value of a diverse workforce, he didn't seem to think it was necessary to develop strategies for getting there—and especially for taking a cold, hard look at some of the subtle barriers to women's advancement that still exist. If objective performance measures were enough, more than a handful of Fortune 500 senior executives would already be women. "

"This meritocracy fiction may be the single biggest obstacle to women's advancement."

While the issue of gender inequality in corporate board rooms and executive suites is obviously complex, one particular item I was reminded of while reading this was the suggestion that having a few more women in positions of power in the financial industry might have actually allowed us to avoid the recent financial crisis.  As one news item put it (here):

There is a dramatic difference in the data between female and male risk-taking types…. Evolutionary speaking, the species has survived because of the balance of the genders. One would suggest that in investment banking, which is very male dominated, you need a balance of risk types if you want to survive. If you’re not recruiting people of all risk types, you’re missing out on a fundamental self-controlling mechanism. It’s a bloody good formula for survival.

For another perspective you might want to review Julie Nelson’s essay, “Would Women Leaders Have Prevented the Global Financial Crisis? Implications for Teaching About Gender and Economics,” which is available via SSRN (here).  Here is the abstract:

Would having more women in leadership have prevented the financial crisis? This question challenges feminist economists to once again address questions of "difference" versus "sameness" that have engaged — and often divided — academic feminists for decades. The first part of this essay argues that while some behavioral research seems to support an exaggerated "difference" view, non-simplistic behavioral research can serve feminist libratory purposes by debunking this view and revealing the immense unconscious power of stereotyping, as well as the possibility of non-dualist understandings of gender. The second part of this essay argues that the more urgently needed gender analysis of the financial industry is not concerned with (presumed) "differences" by sex, but rather with the role of gender biases in the social construction of markets. An Appendix discusses specific examples and tools that can be used when teaching about difference and similarity.

Stefan Padfield