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Quota this: Women at Davos

Dr. Sasha Galbraith is a partner of Galbraith Management Consultants, an international consulting firm, and a former vice president of Wells Fargo.

The world's biggest power schmooze fest begins Wednesday in Davos, Switzerland. But this year, something will be different. The press has made much of The World Economic Forum's (WEF) new quota system, whereby companies are being asked to include a woman among every five delegates. In fact, WEF organizers have downsized the number of coveted white badges that its "strategic partners" will get from the usual six to this year's four. But a number of those partners--companies like Chevron, Cisco and Aetna, who pay half a million bucks a year to join that club--protested. So the WEF said that they could include one more person as long as she is a woman with a decent title, like chair or CEO. Well, is that really a quota?

The WEF itself is setting an example, since two of its six co-chairs are women. And this year's themes are sufficiently vague to be inclusive of just about anyone. One of them, Responding to the New Reality, includes notions of volatility, global competition and "reshaped roles of governments," which all sound more like the old reality to me.

For some of the strategic partners, like Fluor, the white badge dilemma presents a very tough decision. Do we suddenly promote a woman to group president? Or just bring the top four guys to the big, invitation-only event? Or do we bring more guys and relegate them to one of the 38 lower-status color badges? Some of the strategic partner companies (such as Swiss International Air Lines) not only have NO women on their boards, but also don't have ANY women in their senior executive ranks. Hmmm, maybe that's where the WEF can have some impact: Male-only companies need not apply.

Among the Swiss companies that are part of that strategic partner club (ABB, Credit Suisse, UBS, Nestlé, Novartis, Swiss International Air Lines, Swiss Re and Zurich Financial), the vast majority have at most one token woman on their senior management teams. The rest of the senior leadership is overwhelming white and male. As a native Swiss, that comes as no surprise to me. After all, sighting a female senior executive in Switzerland is about as rare as seeing a cuckoo.

But just think how much more prosperous these companies could be if they would add more diversity to their management teams. A growing body of research shows that companies with a critical mass (more than 35 percent) of women in senior management have higher quality earnings, higher share price and lower risk profiles than their mostly-male counterparts.

One thing that seems to be consistent with women-run companies is that the gender balance throughout the organization mysteriously starts to approach 50/50. Take, for example, Alcatel-Lucent. In 2007, the last full year that Patricia Russo was the CEO, her management team was 44 percent female. Today, only 2 women serve on the 12-person management team, dropping the female executive ratio down to 17 percent.

Leave it to a few enlightened American companies to lead the way when it comes to gender progress at the WEF. Pepsi, Kraft and DuPont (all strategic partners) can give their fancy fifth white badge to their female CEOs (or chairman of the board, in the case of Deloitte and Intel)--who could bring a bunch of male subordinates with them. Or they might really shock the male-dominated summit and bring a bunch of female senior executives along.

By Sasha Galbraith

 |  January 25, 2011; 3:20 PM ET |  Category:  Business Leadership , Women in leadership , organizational culture Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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