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Research Uncovers Clues to East Asian ‘Bamboo Ceiling’

Asians have achieved considerable success in the United States. They are better educated and wealthier than other ethnic groups. Despite these achievements, Asians appear to be disproportionately underrepresented in leadership positions in the U.S., a perplexing problem known as the “Bamboo Ceiling.”

Researchers from MIT Sloan School of Management, Columbia Business School and the University of Michigan rigorously examined this problem to understand the scope and root causes of the “Bamboo Ceiling.”

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Their research, recently published in the Proceedings of the National Academy of Sciences, finds that East Asians (e.g., Chinese, Japanese) are less likely than South Asians (e.g., Indians, Pakistanis) and whites to attain leadership roles in American organizations. Importantly, the leadership attainment gap emerged for both U.S.-born and foreign-born Asians, which controls for English fluency, meaning that the
gap is not merely a function of the greater prevalence of English in South Asia.

The research arrives at a time when issues of ethnicity, leadership and inclusion in American society — and Asians’ place within these issues — dominate national conversations.

“Strongly influenced by Confucianism, East Asian cultures encourage humility, harmony and stability,” said Jackson Lu, a professor and researcher at MIT Sloan. “East Asians may be culturally less inclined to speak up and assert their opinions. By contrast, South Asian cultures encourage debate and argumentation, as discussed in Nobel Laureate Amartya Sen’s book, The Argumentative Indian. Mainstream American culture encourages assertive communication too. So even when East Asians are just as competent and interested in leadership opportunities as their South Asian and white counterparts, they may come across as less suited for leadership in the U.S.”

“In the two months since our paper was written, South Asian CEOs have been announced at prominent American companies like Google’s parent company Alphabet, IBM and WeWork,” said Michael Morris, the Chavkin-Chang Professor of Leadership at Columbia Business School. “In contrast, there are few prominent East Asian CEOs, even though there are 1.6x more East Asians than South Asians in the U.S.”

“This comparison of Asian subgroups is important because it helps us understand why the Bamboo Ceiling exists and how it can be remedied.”

“As American organizations become more diverse, they need to diversify the prototype of leadership and look beyond assertiveness for evidence of leadership aptitude.”

To understand why the Bamboo Ceiling exists for East Asians but not South Asians, the researchers conducted nine studies with a variety of research methods, including historical analyses of S&P CEOs over the last decade, surveys of senior managers in large U.S. organizations, and studies tracking the leadership attainment of entire MBA cohorts. The researchers explored three potential causes — prejudice, motivation and assertiveness — while controlling for demographic factors, such as birth country, English fluency, education and socioeconomic status. Across the studies, the researchers came to several conclusions:

  • Prejudice: While prejudice affects all minority groups, it does not explain the leadership attainment gap between East Asians and South Asians. In fact, the studies consistently found that South Asians face more prejudice than East Asians in the U.S. For example: In one of the studies, non-Asian Americans evaluating job candidates preferred to befriend East Asians (e.g., share an office or live nearby) but endorsed 
    South Asians more for leadership positions.
  • Motivation: East and South Asians both scored high in motivation to work hard and motivation to attain leadership positions, indicating that insufficient motivation is not the main cause of the Bamboo Ceiling.
  • Assertiveness: Importantly, cultural differences in assertiveness consistently explained the leadership attainment gap between East and South Asians. Across different kinds of studies, East Asians scored lower in communication assertiveness (i.e., speaking up, constructively disagreeing, standing one’s ground in a conflict), and this difference statistically accounted for the leadership attainment gap.

“The fundamental culprit here is that East Asians’ communication style is misaligned with American leadership expectations. A non-assertive style is perceived as a lack of confidence, motivation and conviction,” Morris said. “People can learn multiple styles of communication and how to code-switch between them. As American organizations become more diverse, they need to diversify the prototype of leadership
and look beyond assertiveness for evidence of leadership aptitude.”

United Kingdom

Corporate Governance Should Go Beyond Gender Pay

Reporting season is underway for 2020 in the United Kingdom, and remuneration continues to be an area of focus. 

While some companies voluntarily disclosed the difference in pay between the CEO and the wider workforce in their 2018 annual report, all listed companies with more than 250 UK employees will need to make that disclosure this reporting season under the 2018 UK Corporate Governance Code.

The new code also includes one provision that is causing a lot of last-minute activity: Compliance and legal advisers are advising Remuneration Committees (Remco) that they must “review workforce remuneration and related policies and the alignment of incentives and
rewards with culture,” according to section 5, prov. 33 of the code.

To satisfy this, companies need to show that remuneration across the business is living up to policy statements on equal pay and opportunity. This travels far beyond the easier task of reporting on CEO pay ratios and the gender pay gap.

Remcos are now demanding data on a much wider range of factors that relate to pay equality and diversity. Additionally, they want to see all reward data, including shares, benefits and pension, and not just pay.

Given the widely scattered data sources, organizations will likely struggle to collect the data to report accordingly. That, however, won’t suffice as an excuse, according to Leena Nair, Unilever’s chief human resources officer.

“There’s no excuse for any company to say, ‘I can’t do this, because I don’t have the data to provide Remcos with the insights they need,’” Nair said. “Every company has the data. They must provide it.”

According to uFlexReward, a digital total reward platform, businesses in sectors with known wide gender pay gaps should already be auditing their salary structures on a role-by-role basis and taking necessary measures to address anomalies.

Canada

Female Leadership Representation on the Rise in Canada

A key variable to improving the gender pay gap is having more women in leadership positions.

This is something that is beginning to take hold in Canada, according to a report from Catalyst and the 30% Club Canada. The report, “Women in Leadership at S&P/TSX Companies,” reveals encouraging progress for women on boards and executive teams at companies in the S&P/TSX Composite Index, widely viewed as a barometer of the Canadian economy.

According to the report, the percentage of women on boards has risen from 18.3% to 27.6%, and women on executive teams from 15% to 17.9%, over the past five years.

“We are definitely seeing progress for these index companies, particularly when it comes to advancing women on boards, and these numbers reinforce that this country’s largest companies are leading the pack in this area,” said Tanya van Biesen, executive director, Canada, Catalyst. “But there is clearly still much work to do to accelerate progress for women at the executive level.”

“Gender-diverse teams not only encourage better leadership and governance, but also contribute to increased corporate performance for both the company and its shareholders.”

The report offers a snapshot of progress for the companies included in the S&P/TSX Composite Index over a five-year time period ending Dec. 31, 2019, as well as a comparative perspective on progress versus all disclosing companies on the TSX. It also provides a full list of index companies with 30% or more women on boards and 30% or more women on executive teams.

As of August 2019, for the first time in Canada’s history, every company in the S&P/TSX Composite Index had at least one woman on its board.

“Gender-diverse teams not only encourage better leadership and governance, but also contribute to increased corporate performance for both the company and its shareholders, a win-win for everyone,” said David Pathe, chairman, president and CEO of Sherritt International Corp., and co-chair of 30% Club Canada.

Data for the report was supplied by MarketIntelWorks, a data research and analytics company with a focus on gender diversity.

Global

Should Employers Butt Out? Anti-Smoking Policies Raise Questions 

It’s a question that’s getting to be more common in our 21st-century workplace: How far can a company go to control employee behavior off the job that might impact their health and behavior when they’re on the job?

A case in point: U-Haul’s recent decision to stop hiring smokers and nicotine users.

Starting Feb. 1, the moving-equipment and storage-unit rental company implemented a nicotine-free policy in states that don’t have protections for smokers’ rights.

The Phoenix-based company says it’s doing this because it wants a healthier workforce.

“This policy is a responsible step in fostering a culture of wellness at U-Haul, with the goal of helping our team members on their health
journey,” said Jessica Lopez, U-Haul’s chief of staff, in a press release.

Not the First of Its Kind

According to a report in the Washington Post, “prospective job applicants in 21 states where companies are allowed to refrain from hiring nicotine- using individuals can expect to see the anti-nicotine policy on job applications and to be questioned about their nicotine use, according to the company. They can also be required to undergo nicotine screening to be deemed hireable in states where testing is allowed. U-Haul, which employs more than 30,000 people across the United States and Canada, will grandfather in current workers who might be nicotine users. The company offers nicotine cessation assistance to employees.”

Sound extreme? Maybe, but U-Haul isn’t the first employer to drop this on its workforce.

As The Atlantic recently noted, refusing work to tobacco users may be an extreme measure, but it’s not unheard of in the U.S. Companies
such as Alaska Airlines, Miracle-Gro and some health-care companies “forbid smokers in their ranks in states where it’s allowed, in addition to countless others with rules on tracking physical activity, weight and sleep.”

“The policy of regulating people’s off-duty conduct is a bad idea, because you have to justify it by some legitimate business reason.”

The magazine also wrote that “this increase in managerial nosiness was encouraged for years by regulations by the Affordable Care Act, and now more than 80% of large employers offer wellness programs, many of which prompt workers to avoid punishment or compete for cash by counting calories, tracking steps, or losing weight. Some programs go further, requiring employees to maintain a certain waist size to avoid fees.”

Just how big a problem is this for employers? According to the Centers for Disease Control and Prevention, smoking-related medical expenses add nearly $170 billion a year to employer and government medical expenses. In addition, employers also suffer $156 billion in lost productivity due to smoking and related health issues.

Canada Considers Nicotine Addiction to Be a Disability

Numbers like that show why so many companies are aggressively pushing health and wellness initiatives for their employees, but intrusive workplace policies that get launched in the U.S. don’t seem to travel very well. That’s because other countries generally take a different view of how intrusive employers can be when it comes to what employees do when they’re off duty.

For example, although U-Haul operates in Canada as well as the U.S., Canadian legal experts say that it’s highly unlikely the new nicotine-free job requirement will ever take hold there. 

That’s because, as Stuart Rudner, a Toronto-based employment lawyer, told the Calgary Star, in Canada “employers are forbidden under the country’s Human Rights Act to discriminate against applicants based on race, sex and disability.”

Under the Canadian Human Rights Act, addictions are classified as a disability, and as a result, they would not be something that an employer could legally consider when they are making hiring decisions.

Rudner said the law hasn’t been tested in Canada, but if someone were to take a potential employer to court with proof their status as a smoker prevented them from being hired, he believes the job applicant would win. 

“It’s actually the addiction that protects the person,” he said.

Canada’s view that smoking and nicotine addiction is a disability that actually gives employees protection from workplace discrimination is generally accepted in most of the world outside the U.S. In fact, even Americans working overseas for U.S.-based companies are not always held to the same workplace standards that they would be if they were back on American soil.

Human resources outsourcing company C2 tells clients that, “as a general rule, federal employment laws do not apply to employees stationed overseas unless the law itself clearly and specifically states that it applies outside the boundaries of the United States ... and when U.S. law will apply to overseas employees can be complex and may require adherence to the conflict-of-law principles where foreign labor codes and practices may clash with U.S. laws.”

Is This Really Just Lifestyle Discrimination?

The biggest clash with U.S. laws — and specifically, this new anti-smoking policy at U-Haul — turns around the notion of “lifestyle discrimination,” and it’s generally something that is prohibited in the rest of the world even as it seems to be growing in the U.S.

The American Civil Liberties Union has come out against nicotine-free hiring, labeling it as — you guessed it — “lifestyle discrimination.”

“Should an employer be able to forbid an employee from going skiing? Or riding a bicycle? Or sunbathing on a Saturday afternoon?” an ACLU legislative briefing asks. “All of these activities entail a health risk.”

Heather Bussing, a California employment attorney who frequently deals with hiring and talent management issues, believes that “the policy of regulating people’s off-duty conduct is a bad idea, because you have to justify it by some legitimate business reason. And if a person doesn’t smoke at work, or in the trucks, or in whatever they’re doing, then it really should be none of the employer’s business.”

But she also sees the other side of the coin — that many employers are trying to encourage healthy behavior because healthier employees are usually happier and more productive. That, at its core, is what the new U-Haul policy seems to be getting at.

Bussing understands that, too, and she makes one more point worth thinking about.

“I encourage employers to have smoke-free workplaces,” she said. “I’m all for that, because smoke gets into the HVAC system and we know that it’s a health issue, so I don’t have any qualms about them saying you cannot smoke at work. But I think the line is that when you are on your own time you should be free to do the things that you want to do — as long as it doesn’t interfere with your capabilities to do the work.”

John Hollon is a contributing writer for Workspan.

Europe

Insurance Broker Aon Acquires Willis Towers Watson

Insurance brokerage Aon has agreed to merge with Willis Towers Watson in an all-stock transaction that is valued at $30 billion.

Shareholders of Willis Towers Watson will receive 1.08 Aon shares for each Willis Towers Watson share, representing a 16% premium to Willis Towers’ March 6 closing share price of $199.71.

“The combination of Willis Towers Watson and Aon is a natural next step in our journey to better serve our clients in the areas of people, risk and capital,” said Willis Towers Watson CEO John Haley. “This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value.”

Aon will own roughly 63% of the combined company, while existing Willis Towers Watson shareholders will own about 37%.

“This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors,” said Aon CEO Greg Case. “Our world-class expertise across risk, retirement and health will accelerate
the creation of new solutions that more efficiently match capital with unmet client needs in high-growth areas like cyber, delegated investments, intellectual property, climate risk and health solutions.”

Aon has a market valuation of $66.8 billion while Willis Towers Watson has a market value of $34.52 billion. The combined company will be
named Aon and maintain its headquarters in London.

In its press release, Aon noted that the merger combines two highly complementary businesses into a technology-enabled global platform that is more relevant and responsive to client needs. The transaction “unites firms that share a belief in the power of data-driven insights to create new sources of client value.”

The transaction is subject to the approval of the shareholders of both Aon Ireland and Willis Towers Watson, as well as other customary closing conditions,including required regulatory approvals. The parties expect the transaction to close in the first half of 2021, subject to satisfaction of these conditions.

Around the Globe is compiled by WorldatWork staff.


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