Women leaders in business: Why is the U.S. a laggard?

March 22, 2013: 5:00 AM ET

Cultural norms stick around long after they're relevant. And in many ways, American business culture stems from a very different era.

130321145748-rosie-the-riveter-240xaFORTUNE -- Businesses across the world need to become more welcoming to women. Arguably, United States-based companies should be leading this charge. They aren't.

U.S. companies are lagging behind not just progressive Scandinavians but also businesses in emerging markets. Companies in countries just now shaping their economies have higher percentages of women business leaders than in the U.S.

Not only does the U.S. lag behind several emerging market countries in terms of female leadership on company boards, but the gap extends to other executive roles. According to a 2013 report by Grant Thornton, only 20% of senior corporate leaders in the U.S. are women. Other G7 countries didn't fare so well either -- take Japan (7%) and the United Kingdom (19%).

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The country with the most women in high places? China. Over half of corporate leaders in China are women. Estonia (40%), Vietnam (33%), and Botswana (32%) rank in the top 10.

"I'm surprised that they're making as much progress as they are," says Erica O'Malley, a partner at Grant Thornton.

How are these nations making such progress?

First off, national cultures that may appear conservative on the surface are in fact more complex. In a 2012 paper called "Cultural constraints on the emergence of women as leaders," authors Geoffrey Leonardelli and Soo Min Toh, both associate professors at the University of Toronto, explore the effects of cultural rigidity related to female leadership. So-called '"tight" cultures punish members of the group from deviating from cultural norms. In general, culturally inflexible countries do not support women leaders.

But there are exceptions to this tendency. Namely, when countries with traditional gender norms implement government mandates or top-down rules about gender equity in business, they tend to take hold. For example, in 2011, Malaysia's cabinet approved a law mandating that companies based in the country include one-third female representation on corporate boards within the next five years. The punishment for failure is harsh: Companies that don't make the cut risk being delisted.

But this is America. U.S. companies don't respond well to government mandates to change the status quo. And that status was solidified in the late 19th and early 20th centuries. America's second industrial revolution was fueled by steel, coal, and oil and designed by men.

The world has since changed, but cultural norms stick around long after they're relevant, especially given the tendency of people in power to surround themselves with people who think like them.

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Emerging markets don't face that problem in the same way. Many are undergoing their very own industrial revolutions right now, and even culturally conservative countries by 2013 standards probably look like socially progressive free-love fests compared to the buttoned-up division of labor prevalent in turn-of-the-century America.

Emerging market economies also have more opportunities to hire women since they are growing, O'Malley says. "If you look at more traditional-valued countries who you think would struggle with putting women in leadership rules, they're also the growth countries, so they're creating new jobs." As these nations are developing their business cultures, women are entering the workforce in high places from the get-go.

The U.S. has less of a clean slate, and will have to quickly come up with an alternative to top-down government mandates to encourage the appointment of senior-level women at corporations. "It would not be a good business strategy to sit and wait," O'Malley says.

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Shelley DuBois
Shelley DuBois
Writer - Reporter, Fortune

Shelley DuBois writes on management issues for Fortune.com. Before joining Fortune, she was a producer for National Public Radio's Science Friday and worked for Wired. Shelley has a graduate degree in science, health and environmental reporting from New York University. She lives in Brooklyn.

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