[Debriefing] A rock-solid glass ceiling

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[Debriefing] A rock-solid glass ceiling

Korea’s top companies made a lot of noise at the end of last year over how many more women they were appointing to executive positions. Annual reshuffle press releases boasted that the number of female executives in top management positions was hitting all-time highs thanks to continuous efforts to boost the representation of women among top corporate ranks.

These claims may be true, but in practice Korea is consistently ranked as the worst country in the OECD when it comes to gender equality in the workplace. Korea was ranked as having the worst environment for working women in the OECD by The Economist’s Glass Ceiling index earlier this month. It also has the largest gender wage gap and is the worst country when it comes to the number of women in managerial positions and on company boards.

Here are the basics on Korea’s heavily-reinforced glass ceiling and what some companies say they are doing to try and crack it.


Q. Korean conglomerates typically announce executive reshuffles at the end of the year. In their press releases, a number of major corporations boasted about how many female executives they had promoted. What did those numbers actually look like?

Figures from Korea’s biggest companies vary with some talking about the number of new executives created and some about the number of executives promoted to senior positions. In general, while most companies did talk about the number of women promoted, these figures were dramatically lower than the number of men.

Lotte Group promoted six female employees to the senior executive level in its annual reshuffle last December, raising the number of senior female executives across the conglomerate to 36, up from three in 2012. The total number of newly promoted senior executives was 109, meaning just 2.75 percent were women.

CJ Group announced last October that it was promoting the largest number of female executives in its company history for its annual reshuffle — a grand total of 10. This was the first time the figure reached double digits. The company promoted a total of 77 executives.
At LG Electronics, seven among 56 newly promoted top executives were female. This raised the total number of top female executives to 29, up from 14 in 2014.

Samsung Electronics promoted eight female executives out of 158 total appointments.

Some companies announced proud “firsts” this year: Samsung Electro-Mechanics announced the promotion of the first female top executive in the company’s 40-year history. LS Group also appointed its first female top executive. Shinhan Financial Group appointed a new female executive for the first time in five years.

Q. How does that compare to previous years?

There are no overall statistics on the number of women taking on senior management roles each year in Korea. Based on press releases, the number of top female executives appears to have been very gradually increasing since the mid-2010s. Lotte, CJ, LG and Samsung all promoted more female executives to top management positions at the last reshuffle than the previous year.

Finance, an industry that is traditionally even more male-dominated than the others, also promoted more women than usual this year, with Korean media reporting that there were “cracks in the glass ceiling.” In practice, women still account for less than 5 percent of executives in finance, but KB Securities did notably appoint the first female CEO in the industry.

According to data from the Ministry of Gender Equality and Family last November, the number of female executives at Korea’s 500 largest companies by revenue rose to 454 in 2017 from 353 in 2014, when the ministry first started compiling such data. The number of local companies that had at least one top female executive rose from 152 to 172 in the same period.


Q. How does that compare to the number of men in executive positions?

In 2017, the 454 female executives at the top 500 companies accounted for just 3 percent of all top executive positions, although even this low figure was a gradual increase from 2.3 percent in 2014. The number of companies that have any female executives is also rising, but as of 2017, two-thirds, or 65.6 percent, of the 500 companies still had no female senior executives according to government data.

Q. Are there any companies that are doing at least reasonably well at tackling gender inequality among executives?

Among Korea’s top 30 conglomerates, Samsung has the largest number of female board members — five, according to an analysis of financial statements by CEO Score last September. There are 141 male board members.

SK came second with 4 out of 195 board members, followed by Lotte with 3 out of 115 and Hyundai Motor with 2 out of 141. They are the only four conglomerates that have more than 110 board members.

Seven conglomerates had a single female board member and the remaining 19 had zero. There were a total of 21 female board members across all 30 conglomerates, equivalent to 1.3 percent. Two were members of owner families.

Q. How does Korea compare to other OECD countries when it comes to the ratio of male to female executives?

Despite figures showing signs of improvement from a Korean perspective, the reality is that gender equality here is still miles behind the OECD average.

In a 2017 OECD report, 2.1 percent of board members across the top companies were female, the worst among the 36 countries on the list. The OECD average was 22.3 percent that year, dramatically higher than Korea, which scored worse than neighboring countries Japan, ranked second worst with 5.3 percent, and China, at 9.7 percent.

Q. Were there any differences by industry?

Retail and commerce had the largest ratio of female executives in Korea, at 4.1 percent as of 2017 according to the Gender Equality Ministry. Second place goes to finance and insurance at 3.7 percent, followed by 2.7 percent in manufacturing and just 1 percent in construction. Finance has grown the fastest over the past year, while retail has seen figures drop.

The state-owned Korean Women’s Development Institute (KWDI) offered more detailed analysis in an October report. It sorted 277 Korean companies into 20 industries.

According to that report, daily necessity companies have the largest proportion of female executives, at 12.1 percent. It was the only industry that saw figures in double digits. Credit card companies were second at 8.3 percent, followed by food & beverage companies and retail at 5.9 percent. At the bottom of the list with less than one percent were shipbuilding & mechanics with 0.4 percent, cars & components at 0.5 percent, steelmaking at 0.7 percent and trade at 0.9 percent. Pharmaceuticals came last, with 0 percent.

The KWDI report pointed out that the dominance of manufacturing industries like shipbuilding, steel, construction and refining in Korea’s economy goes some way toward explaining why women are still so underrepresented today. The IT and science industries are seeing more women rising through the ranks, but are still traditionally male-dominated, it said.

Q. What is the social context behind the low number of female executives?

In a 2017 report on gender equality, the OECD mentioned career interruption for child care, workplace culture and social expectations as reasons why Korean women withdraw from the labor force.

The KWDI report elaborates on this based on personal interviews with female managers. It summarized that female employees can’t follow the same career path as their male peers as promotions are still affected by the fact that senior managers don’t trust that women can do their work and their perceived duties at home.

Roughly half of the female senior managers interviewed for the study were not married.

Gender inequality isn’t just an executive issue. Lower-level female employees also struggle to climb the career ladder as they miss out on networking opportunities that often still operate like an old boy’s club and lack a female role model.

One interviewee in a sales position in the pharmaceutical industry was quoted in the report: “Men comprise a majority of this industry and they work based on networking. No matter how hard I show my performance in figures, the ones pulled up the corporate ladder are pretty much decided. To join the ranks of the top executives is not an easy task even if you have the skills.”

Q. Is anything substantial being done to tackle this problem at a government level?

President Moon Jae-in has pledged that his administration will pull up the proportion of female executives at state-owned companies to 20 percent by 2022. Last month, the government also pledged to increase the number of new fathers taking paternal leave by 40 percent by 2022 in order to push down the number of women leaving their jobs for child care.

In a New Year’s media briefing in January, Gender Equality and Family Minster Jin Sun-mee announced that the government would introduce a policy where private companies can set a target figure for the number of female executives they would ideally like to have and then receive incentives if they match it.

Jin said the system would not be forced, but companies could voluntarily agree to take part in the initiative. Several European countries including Norway require a company to have at least 25 percent female executives by law.

It remains to be seen if the policy will go through as planned as critics claim it is a form of discrimination against men. The plan was also met with criticism from several female executives during a meeting in February, as some said that if the policy was improperly implemented it could end up doing more bad than good.

The general opinion among the executives at that meeting was that devising a favorable working environment for female employees was a far more important task.

BY SONG KYOUNG-SON, JIM BULLEY [song.kyoungson@joongang.co.kr]
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