CEOs suffering from ‘driver fatigue’ when it comes to gender diversity, warns KPMG

London, 01 January 2016 - CEOs are showing signs of ‘driver fatigue’ when it comes to gender diversity, with many resigned to senior women leaders remaining in the minority for the foreseeable future, according to the findings of new research by the Cracking the Code team, a collaboration between KPMG, Why Women Work, YSC, and the 30% Club.  This is despite business leaders taking active steps to promote and champion women, personally and publicly.

KPMG interviewed 13 chief executives and chief HR officers of global companies employing a total of one million people about their gender diversity strategies, achievements and challenges.  In response the team have today launched new practical steps to help businesses tackle gender diversity.

KPMG found many CEOs have invested substantial amounts of their own time to improve gender equality within the business, personally championing diversity initiatives and leading by example.  More progressive leaders have also invested resource to measure and track gender demographics across their business, helping management to set targets and identify stubborn areas of historic gender imbalance.

However, despite visible progress in the boardroom, the team also found evidence of frustration and fatigue, with CEOs pointing to challenges in changing the culture of the business, impacting their ability to improve diversity in their executive ranks. Some CEOs said the proportion of women being promoted at senior levels was plateauing, despite their concerted efforts.

Many cited cultural attitudes and logistical challenges as major barriers to progress and warned that gender diverse recruitment efforts were often subverted by operational pressure to fill vacancies swiftly.  They found that creating a diverse candidate panel took more time with head hunters reporting women as slower to respond to approaches.

The research also revealed that while CEOs see diversity as an important business enabler, this sentiment is often not reinforced by shareholders and investors.

Melanie Richards, Vice Chair at KPMG, said: “While readdressing the gender balance ranks highly on the average chairman’s agenda, CEOs reported no pressure from peers, the board of directors or shareholders to diversify the executive talent pool more quickly.  In the face of this dearth of support, it is not surprising CEOs suffer the occasional bout of ‘driver fatigue’.

“For the vast majority of business leaders the diversity debate has moved on from benefits to business to a fundamental matter of human rights. CEOs are personally taking action to solve this problem, but need the board and business to give them better backing.”

The global picture

CEOs felt local cultural expectations of women have created very different supply dynamics in different geographies, with former Communist countries providing a more gender diverse talent base than some economies in the West.  Eastern Europe and China were both seen as a rich source of technically experienced women leaders in all sectors. 

Western Europe remains particularly fragmented, with one CEO describing it as “the most engrained old boys’ network” and another as “the most challenging part of the globe in terms of diversity”. 

Over the pond, the research found the long hours culture in the US and presenteeism has had a double-edged impact on women’s careers, while a litigious culture creates psychological barriers to professional networking between male and female colleagues.

While CEOs often set out global principles for diversity and inclusion, they tailor their strategies for each region, and empower local management to make change happen.

Rachel Short, Director of Why Women Work and formerly of YSC who co-led the CEO research, said: 

“When it comes to gender, CEOs are clearly applying the lessons learned from internationalising their organisation’s leadership ranks.  They are setting a clear personal example as they seek to engender commitment rather than compliance to a change agenda that means addressing historical imbalances.   Competitive advantage not political correctness underpins their commitment.  It would be fantastic to see progressive CEOs sponsoring applied research to link gender diversity directly with positive corporate outcomes.”

Global CEOs’ experience of very different rates of progress on gender diversity in different geographies has also been quantified by leadership consultancy, YSC, who found very different ratios of male and female executive leaders across eight regions.

Gurnek Bains, Chairman of YSC, said: “Western companies should not be complacent: some other societies globally are achieving much more success in progressing women to senior roles.  If these companies do not take action to readdress their gender balance and offer equal opportunities to both men and women it will impact their ability to do business with parts of the world where women leaders are the norm.”

Brenda Trenowden, Head of Financial Institutions, Europe and Head of Banks & DF Americas at ANZ, and Global Chair of the 30% Club, added: “The data shows a concerted effort is required at all levels within organisations, and all stakeholders, to engender positive change. Having just a handful of champions is clearly not working. The 30% Club is committed to driving change from the schoolroom to the boardroom, and not just in the UK, but globally. As we begin 2016, we will continue to focus on our pipeline initiatives which nurture more female talent for the top jobs of the future, but also encourage the advancement of mentoring programmes, school visits, research, scholarships and career advice to create the momentum that will support these leaders in achieving the change they seek.”

Using the insights of the CEOs, the Cracking the Code team have compiled the following practical steps to help businesses tackle gender diversity:

  1. Quantify the impact gender diversity has on commercial performance and use this to sell the case for greater progress to reluctant managers;
  2. Tackle pockets of stubborn historical gender imbalance and target business units where women are clearly underrepresented;
  3. Help male managers feel comfortable and confident talking about the gender mix;
  4. Firmly and publicly engage with male colleagues to deal with logjams by providing visible support to female colleagues.  It must become the norm to intervene when males and female colleagues are treated inconsistently;
  5. Track which male leaders are really developing female talent.  Buddy those struggling with successful senior female executives to help their thinking.

-Ends-

Media enquiries:
Zoe Sheppard 0117 905 4337 / zoe.sheppard@kpmg.co.uk
KPMG Press Office: 020 7694 8773

About KPMG
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

About Why Women Work
Why Women Work is an innovative social enterprise, founded in 2015, to boost the number of women in corporate leadership roles. Deploying a network of experts to partner with executive teams in creating an enabling ecosystem for gender diverse leadership talent. Partnering can range from advisory services on diversity initiatives, to demonstrating a live business case for diversity, through to executive collective coaching (‘E-Co-Coaching’) on changing the diversity climate. The underlying ethos is always the same; to understand what is working for men and women in a specific context and to use this insight to accelerate change.  Run on a commercial basis, all profits are channelled into supporting pro bono research and activism on gender diversity.

About YSC
We are the world’s premier independent leadership consultancy. We partner with clients across their leadership and talent agendas, helping organisations to achieve sustainable success by releasing the power of their people. We make broad impact through deep insight, underpinned by rigorous independence and led by qualified, characterful and authentic consultants. We are global in our reach, supporting iconic multinational, regional and local companies, as well as government bodies and not-for-profit organisations. Our key client offerings include cutting-edge services and thought leadership in the arenas of Board and CEO development and succession planning; executive assessment; executive coaching; leadership development; leadership frameworks and culture change; diversity and inclusion; executive team development; and emerging talent and identifying potential.