The challenge seems to be a perpetual – there are never enough women in senior management at large corporations. Research done by Catalyst clearly demonstrates that we are stuck – in 2002, women represented 15.7% of corporate officers – and the number is exactly the same in 2009. The same study showed that women currently represent 6.2% of top earning executives, and 5.2% in 2002. Today, women are 3.0% of Fortune 500 CEOs; they were 1.2% in 2002. So there has been some small movement in top earners and CEOs – but happiness is a low base. Given that women represent almost 50% of the workforce according to the bureau of labor statistics , this senior level representation – and lack of progress – is abysmal.
I have heard some people argue that the issue is one of “pipeline,” that is, that there simply aren’t enough women on the executive track to get them to the top. On the face of it, that doesn’t fly – women have been approximately 30% of the MBA classes at the top business schools for decades. However, women have myriad obstacles in their path that do not affect men. According to the September, 2007 Harvard Business Review article “Women and the Labyrinth of Leadership,” by Alice H. Eagly and Linda L. Carli, these obstacles range from prejudice to resistance to women’s leadership and styles to lack of a strong network to the demands of family life.
A senior executive coach I spoke with recently, who has coached C-level executives for many years, including approximately 25% women, answered a few questions for me. I asked how women leaders compare to men, in his experience? His succinct reply: they are far better. I asked why he believes there are fewer women in senior management than men? Again, his crisp reply: because they are far too sane.
And yet the lack of women leaders in most major corporations has a huge potential downside for the corporations themselves. Much work has been done over the years to identify “the business case” for diversity. A recent study done at the Ceram School of Business in France determined that “Feminization of management seems to be a protection against financial crisis.” They showed that companies with a higher percentage of women in management seemed to perform better in the first few months of 2009 than those with lesser percentages. The study, done by Michael Ferrary, a professor of Human Resources, stated “Several gender studies have pointed out that women behave and manage in a different way than men. They tend to avoid risk and to focus more on a long term perspective. A larger proportion of female managers balances the risk taking behaviour of their male colleagues.” Ferrary highlights two remaining questions: More female managers = better business performance ? or: More gender diversity in management = better business performance ?
Similarly, in October, 2007, Catalyst published a study in which they demonstrated that corporations with more female board representation outperformed – on a number of important business metrics – those with fewer women. In January, 2004, Catalyst research demonstrated results similar to Professor Ferrary’s, but focused on senior management – and used a larger, U.S. based sample. The 2004 study showed that “companies with the highest representation of women on their top management teams experienced better financial performance than companies with the lowest women’s representation. This finding holds for both financial measures analyzed: Return on Equity (ROE), which is 35 percent higher, and Total Return to Shareholders (TRS), which is 34 percent higher.”
So, to put this together:
- Women have made very little progress in the U.S. on achieving the top levels of corporations, despite a consistent pipeline for many years
- This is likely due to a wide variety of factors, some of which are controlled by the women themselves (e.g., resigning to maintain work life balance) and some of which are controlled by leadership at the various companies.
- Data suggests that diversity of gender in management and on the corporate board helps generate better corporate performance.
How can we get unstuck, given the data demonstrating the benefits of change? Eagly and Carli’s HBR article makes a number of structural recommendations. My conclusion aligns with theirs. I particularly believe that this will not be addressed without deep structural changes in corporate roles. Bear in mind that the current corporate organizational chart was built on a military model and designed for manufacturing, where command and control was critical. Now, we are largely in a service industry where collaboration and team work is more important – and are documented to be (on average) greater strengths for women than for men.
But first, as we learn in coaching, there must be a serious desire for change. The change required to propel women to the top of organizations is extensive, and will not happen without enormous effort and commitment on the part of the men who currently run most corporations. While some men currently help promote women out of a sense of fairness, it is likely that an expanded pool of committed men will only come as additional, irrefutable, cause-and-effect, controlled studies emerge to prove the business case for women in management.
We would welcome your comments. Or if you need training or coaching support on women in leadership, please contact us!
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Tags: Career management, Leadership, Women