Could achieving gender diversity in leadership be as simple as changing the default in the selection process?

Gender gaps in leadership can be eliminated by assuming every qualified employee is interested in a leadership role, unless they choose to opt out.

Despite the effort and public attention directed toward breaking the glass ceiling, the proportion of women in leadership positions remains disappointingly low.

According to a 2017 Catalyst report, although 44.3 per cent of the labour force in S&P 500 companies are women, only about 25.1 per cent of senior-level managers are female.

Organisations face increasing pressure to adopt diversity programs aimed at encouraging more women to participate in leadership positions.

Yet, there is no clear evidence that these diversity programs lead to any significant changes.

A paper published by researchers from Monash Business School reveals what organisations can do to narrow the gender gap for leadership roles.

The paper by Professors Lata Gangadharan and Erte Xiao from the Department of Economics, with co-author Professor Nisvan Erkal (University of Melbourne) investigates how women’s participation in leadership selection can be increased.

Why women don’t apply

Interestingly, the answer lies in changing the default in the selection process from an ‘opt-in’ to an ‘opt-out’ mechanism.

“This would mean everyone who meets the criteria for the position is automatically considered for the leadership roles unless they specifically say they do not want to take part in the process,” Professor Xiao says.

“The gender gap persists despite various programs designed to make women more confident, assertive, and less risk-averse. Our approach focuses on changing institutions instead of getting women to change themselves.”

While this mechanism can help with leadership roles, it can also work for promotions.

Professor Gangadharan sits on several Monash University promotion panels and says often qualified women hesitate to apply for top jobs.

“When they do apply they have a good chance of being successful (sometimes higher than male candidates). But many women feel they are not ready, they would rather wait and be more confident that they will be promoted,” she says.

Comparing mechanisms

Using a series of four incentivised experimental studies with over 1,000 participants, the research team compared the opt-in mechanism with the opt-out mechanism.

Data from the studies show that women are much less likely to opt-in, explaining the gender gap.

“We found that the leadership selection in both the public and private sectors relies predominantly on an opt-in mechanism where potential candidates have to put their hands up and actively choose to indicate an interest in the leadership position,” Professor Gangadharan explains.

For example, in many organisations, ‘call for expressions of interest’ emails are sent out whenever there is a need to select a new leader.

“To be considered for the position, individuals have to notify the authority of their interest. Under this mechanism, the default is that individuals are not in the leadership selection process,” Professor Gangadharan says.

The proportion of women in leadership positions remains disappointingly low.

Why most organisations opt-in

The ubiquity of the opt-in mechanism was supported by a survey they conducted in 2016 with MBA students at Monash University who have work experience.

More than 70 per cent of the participants indicated that the leadership selection process in their organisation is similar to an opt-in mechanism.

But when it is reversed to the opt-out mechanism, more women choose to participate in the selection process, resulting in a greater chance of women being chosen and narrowing the gap.

Interestingly, they found that compared with men, women were significantly less likely to participate in leadership selection under the opt-in mechanism, even when they knew that their performance was among the best.

Such a gender gap no longer exists under the opt-out mechanism.

“We also found that the gender gap disappeared when the competitive element to the selection process was removed in the opt-in mechanism. It seems that women do not want to compete under the opt-in mechanism. In contrast, under the opt-out mechanism, women are just as likely to compete as men,” Professor Xiao says.

Changing the default may not be simple

The researchers realised that there were some potential issues that arose when introducing a new mechanism.

Professor Gangadharan explains that it is important to consider whether people will accept it.

“The opt-out mechanism can sometimes lead to the concern that people may be included in the selection pool against their wish,” she says.

“For example, a person may worry that choosing not to participate under the opt-out mechanism may send a negative signal and consequently may lead individuals to ‘reluctantly’ choose to participate.”

They then conducted the third study to provide insights on perceptions of the opt-out mechanism.

The researchers found that neither men nor women show a strong preference for either mechanism, suggesting that there is no attitude-based barrier to implementing an opt-out mechanism in their experimental setup.

More research, however, is needed to understand the attitudes towards the opt-out mechanism in different organisations and institutions.

The opt-in mechanism could also encourage more women and men from different ethnic groups to apply for leadership roles.

Suggestions for future research

While the research focuses on gender, the researchers are convinced that there may be wider applications for this mechanism that would help unlock other areas of diversity disparity such as race.

“I wouldn’t be surprised if the mechanism also worked with race. This would encourage more women and men from different ethnic groups to apply, bringing more diversity and increasing the number of qualified people in the selection process,” Professor Xiao says.

In future experiments, the researchers would like to examine whether the opt-out mechanism continues to increase female leadership participation in contexts where leaders are expected to undertake skill-based (instead of effort-based) tasks.

“A comparison of traditional male and female tasks could shed light on the effectiveness of the opt-out mechanism in male-dominated fields, where going against gender concordant norms can be more difficult,” Professor Gangadharan says.

“The mechanism we are suggesting is much simpler than affirmative action and quotas because it’s all merit-based and it’s only people who are actually qualified and who perform well who is going to be elected as leader.”

Published on 26 Oct 2021