As countries think about how to stimulate their economies amidst the continuing throes of pandemic turbulence, Mexico has an attractive option that implies economically empowering 51.2% of its population, women. At 41%, Mexico has one of the lowest female labor participation rates in the OECD and in Latin America. Sadly, this rate was the same in 2005, which means that despite what some point to as anecdotal evidence of progress, Mexico has a long way to go on the gender inclusion spectrum.
If Mexico’s government and the private sector start to take gender inclusion seriously, putting in place programs that will enable more women to work in the formal sector and increasing the participation rates closer to the rate of 55% in countries like Canada – a regional partner – it is estimated that Mexico’s GDP would expand 15% by 2030 (IMCO).
Female empowerment is not a “nice to have,” but is absolutely essential for economic growth and improved profitability. So what is holding us back? I will focus on a few things that the private sector can do to ensure greater gender inclusion. I am purposely using the term inclusion as distinct from diversity, though both are important. Diversity is the acceptance of difference, while inclusion is the active promotion of gender, racial and socioeconomic heterogeneity as a competitiveness strategy.
I have worked in Mexico’s private sector for the better part of twenty years and believe we have made slow progress with respect to the acceptance of gender diversity but real inclusion remains lacking because it needs to be established as a business priority and a metric that is reviewed and rewarded, as with any other efficiency indicator.
Last week the organization 5050 Women on Boards held a virtual US-Mexico discussion focused on strategies to both encourage and enable more women to reach the coveted realm of corporate boards. Female participation rates on the boards of listed companies in Mexico can vary by category, but at best representation reaches 10% if you include all types of participation, while the more accurate measure – in line with the way it is measured in other economies – indicates that only 2% of independent board members are women in Mexico.
Why does this matter? Most Mexican women will never have the opportunity to participate on a corporate board, but the lack of board diversity still affects the average woman. Women need to be on boards precisely because that is where the corporate culture and the rules of the game are established. During a fascinating discussion with three high-achieving Mexican women who serve on boards both in the US and in Mexico, all agreed that when women are at the table suddenly issues like the pipeline of female talent within the company and the gender pay gap come up during board conversations. In other words, female representation promotes female inclusion. And that is important because according to data from the Mexican stock exchange, BIVA, while 35% of the labor force of listed companies are women, only 15% are at the VP or director level, and only 1% are CEOs. In order to reach the goal of greater female participation in the workforce, boards should ensure that internal corporate policies enable women to rise up the ranks. Further, by ensuring women make it to the top, we can create a virtuous cycle in which the pool of potential female board members increases.
It is not conjecture that gender inclusion is a competitiveness driver at both the country and company level; there are countless studies both internationally and in Mexico that quantify and describe its value. Any management team or board of directors that does not have an explicit strategy to establish greater gender inclusion is shooting itself in the foot and is in dereliction of its duty to its shareholders by knowingly leaving money on the table.
The empowerment of women is not a niche issue, nor are women a minority. The women of Mexico are a majority, and by empowering them we can pave the way to greater economic prosperity. Enough talk, manos a la obra!