Qualified but Underrepresented: Addressing the gap for women leaders in Latin America and the Caribbean

Gender equality and women’s leadership including  women’s participation in decision-making positions within households, workplaces, and communities is key to well-being and prosperity. In its new Gender Strategy 2024-2030, the World Bank recognizes that women’s leadership improves outcomes across a range of development priorities, including food security, community services, and children’s health, and education.

In the private sector, a research from the International Finance Corporation (IFC) has shown that more women in leadership positively correlates with better environmental, social and governance standards, leading to improved business performance and inclusive economic growth. Addressing the barriers to women’s leadership is a strategic priority in IFC’s implementation plan of the Gender Strategy. It involves refining solutions that help more women get on boards, and investing in businesses that expand quality jobs for women, particularly in male-dominated sectors. It also encourages private sector investments in childcare, making it easier for women to balance work and family.

In this blog post we shed some light on women’s leadership in Latin America and the Caribbean, focusing on women as business owners and as senior-level managers in the private sector.

Women in business leadership in the region

In the Latin America and the Caribbean region, almost 50 percent of private companies have a woman among its owners. Yet, many of these firms are micro, small, and medium enterprises (MSMEs) and most are active in retail or small commerce sectors. Around a third of women-led MSMEs report financial constraints, and in general they have limited access to credit, banking services and business training. Moreover, women entrepreneurs are 10 percent more likely than men to state ‘job scarcity’ as a reason for starting a business.

As for women in senior management positions, the share is much lower. According to a 2022 IFC study of nine stock markets in Latin America, on average, women represent only 14% of Board members and only four percent of CEOs of listed companies. The percentage of all-male Boards ranges from 23 percent in Brazil to 52 percent in Bolivia.

Household surveys in 16 countries in Latin America indicate that over the period 2000-2022, female managers and business owners represented a relatively stable share of three to five percent of the labor force. These female managers and business owners are concentrated in female-dominated sectors, mainly health and social work, education, and hotels and restaurants (Figure 1). In contrast, male managers and business owners dominate the largest employment sectors (employing two-thirds of all workers) like manufacturing, wholesale and retail trade, agriculture, construction, and transportation. 

Figure 1: Percentage of female employees, managers, and business owners by sector

^{Source: Authors’ calculations using SEDLAC harmonized data}

This does not have to do with women in the region being less qualified to lead. The profiles of women leaders in the region are highly competitive. In almost all sectors, women leaders are more educated than men (for example, 69 of female managers have a university degree, compared to 58 percent of male managers). Nonetheless, women leaders are typically paid less than their male counterparts, with the wage gap — the difference between male and female average wage—reaching 4 percent for managers and 11 percent for business owners.

What has worked in closing these gender gaps in business leadership?

Access to finance, technology and training are essential to encourage women to become entrepreneurs and improve business operations of current business owners. IFC’s Banking on Women program has facilitated over four billion dollars to finance women and women-led MSMEs in the region through investments and advisory projects with financial institutions. In Guatemala, the World Bank’s DIGITAGRO project developed digital tools to connect smallholder women farmers to a national initiative aiming to use family farming as providers for school meals. Following the campaign, the share of women reporting knowing how to register as providers was raised by 21 percent, the sale of animal products increased by 12 percent, and prices received by women agri-preneurs increased by 31.5 percent. In Mexico, a training program on soft skills and business literacy offered to women entrepreneurs (Mujeres Moviendo México), led by the Latin America and the Caribbean Gender Innovation Lab (LACGIL), has resulted in a significant profit increase.

Evidence is building on approaches that increase the share of women business leaders. Through market analyses, capacity building, and guidance, IFC has helped promote diverse and inclusive business leadership. Initial training programs have helped built local partner capacity that led to Colombia's women on boards rising from 16% in 2019 to 18.5% in 2021, for example. A mentoring program in Brazil has also thrived. Now training its 9th cohort, the program reported 64% Board placement after completion. IFC’s Mexico2Equal program brought together 17 companies that employ over 450,000 people in Mexico to learn about inclusive leadership and to make commitments to gender and economic inclusion in their operations. As a result, one company established its first mentorship program for women, another introduced targets for women in leadership, and another introduced sex-disaggregated data on Board members.

Women are indispensable as business leaders if we are to achieve gender equality and inclusive leadership in economic development. Latin America and the Caribbean have taken some steps forward, but gaps persist. More initiatives are needed to achieve better gender balance in business leadership, support women to unleash their leading potential, and to provide women leaders with much-needed access to financial resources and support networks.

The LACGIL within the Poverty and Equity Global Practice, works in partnership with units across the World Bank, aid agencies and donors, governments, non-governmental organizations, private sector firms, and academic researchers. This work has been funded in part by the World Bank Group's Umbrella Facility for Gender Equality (UFGE), a multi-donor trust fund administered by the World Bank to advance gender equality and women's empowerment through experimentation and knowledge creation to help governments and the private sector focus policy and programs on scalable solutions with sustainable outcomes. The UFGE is supported by generous contributions from Australia, Canada, Denmark, Finland, Germany, Iceland, Ireland, Latvia, the Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom, United States, the Bill and Melinda Gates Foundation, and the Wellspring Philanthropic Fund.

Subscribe and receive a weekly article