Fallacies about workplace gender parity

Chanda Kochhar’s ignominious departure as CEO of India’s largest private sector bank on alleged corruption charges, and Shikha Sharma’s early exit from Axis Bank for poor due diligence appear to have tarnished the Golden Age of women at the top of Indian banking. The very public serial failures of these women leave crestfallen advocates for gender parity in the boardrooms and have, unsurprisingly, prompted sotto voce triumphalism in the old boys’ clubs.

Both views reflect the distorted lens through which we view the issue of gender equality in the boardroom and the workplace.

Those men with attitudes cemented in outmoded sexism tend to set women to higher performance standards than they would for men competing for the same job. It is an un-level playing field, of course, that has the sole virtue of predictability. Women take it in their stride as the costs of rising up the ladder.

The bigger problem, to my mind, comes from the woolly, rose-tinted logic applied by advocates of gender parity in the workplace. Examine the recent literature on the subject and the dominant theme is some sort of highly generalised risk-reward equation. Women leaders tend to have a more community-oriented outlook and leadership style than men, one advisory tells us. Another suggests that they are more “intuitive” or “caring” or “ethical” than male corporate leaders. In short, the narrative we’re spun is that women somehow manage to be kinder, gentler and yet as able as their male counterparts — an updated, corporatised version of the Venus versus Mars cliché, if you will.  

As an additional inducement, numerous studies purportedly demonstrate that hiring women is better for the bottom-line. A 2016 study covering 21,000 public companies in 91 countries showed a “positive correlation” between gender diversity and corporate profitability. Remarkably, it even predicted that organisations with 30 per cent or more female leaders could increase their net margin by up to six points.

The problem with such studies is that they rarely present the counter-factual. Would the performance of these companies have been the same, worse or better without gender diversity? A 2015 McKinsey study attempted an answer. It showed that companies with low gender diversity consistently performed worse than those with better diversity. But we do not know whether gender-diverse companies are successful because they were, well, good companies with strong managements and/or operating in fast-growing industries or because of their larger complement of women executives. Do we know whether these companies became successful and then became gender-diverse or was it the other way round? It is difficult to draw a direct causative relationship between the two facts.

This line of advocacy raises a bigger problem for women as the chauvinists: It, too, holds them to a higher standard, and in this case a spurious one. Ms Kochhar and Ms Sharma’s controversial resignations offer the counterpoint that women CEOs need not be imbued with all the special attributes that rights advocates ascribe to women. Facebook COO Sheryl Sandberg’s blowout over evidence on Russian infiltration being revealed to the board presented a portrait of an executive who practised “leaning in” in ways quite distinct from those advocated in her bestselling book. Equally, none of the women directors on boards of companies that have suffered serious governance issues in recent years — from Infosys to Infrastructure Leasing & Financial Services (IL&FS) and YES Bank — appeared to have been assailed by ethical pangs any more than their male counterparts.

These examples suggest that the case for gender parity in the workplace or boardrooms needs to be de-linked from the trade-off method of advocacy. As with all arguments for plurality, whether they are based on caste, race or creed, gender parity is a desirable quality for its own sake. A diverse institution is a socially healthy one, a factor that has a knock-on effect.

Ms Kochhar and Ms Sharma owe their positions not to their gender but because they were outstanding performers within a field that included male candidates. Importantly, both were beneficiaries of K V Kamath’s efforts to promote gender diversity when he headed ICICI Bank.

Mr Kamath’s drive for gender diversity has been the Indian financial industry’s gain. Several other women from the bank and its subsidiaries rose to prominence in their careers. We have, for example, Kalpana Morparia (now CEO of J P Morgan India), Renuka Ramnath (who runs one of India’s largest PE funds), Zarin Daruwala (CEO, Standard Chartered India), and Lalita Gupte and Vishakha Mulye, both of whom rose to leading positions within ICICI. The fact that two women ended their careers with diminished reputations should not be read as a cautionary tale about hiring women CEOs. After all, they were no more or less guilty of poor judgement as the male CEOs of YES Bank and IL&FS.