That’s why it’s time to move the conversation beyond the boardroom to the C-suite. It is no longer enough for companies to turn their backs on adding women to their boards. Acquiring and retaining them – in line management roles with profit and loss responsibilities – should be a priority that typically goes to the CEO. And investors, for their part, must train their lenses on how organizations can achieve this, pushing for policies that improve gender balance in executive ranks.
While there are many gender-diverse boards in the US, Europe, Australia, and most recently in Hong Kong, when it comes to the top jobs, women are vastly underrepresented. Many women around the boardroom table may, at some point, cease to be seen as a benchmark for meaningful progress because it does not reflect diversity in all its colors. In the US, for example, women of color fare worse in the leadership ranks.
Of the 503 companies in the S&P 500, 37 – or just 7.4% – are led by women. In Australia, there are only 16 female CEOs in the S&P/ASX 200 index, which is just 8%. Globally, just 6 percent of the 1,507 firms in the MSCI World Index had female leaders as of the end of November, all according to data compiled by Bloomberg.
In Australia, where female board representation is more than 30%, it is estimated that it will take 100 years for women to make up at least 40% of the CEO positions in the 200 largest companies. Among the 300 largest CEOs in 2022, more women are absent from their executive leadership teams than last year, with just four out of 28 CEO appointments in 12 months being female, according to the 2022 CEO Women’s Executive Census.
Companies are struggling to retain the few female leaders they have in America. By McKinsey & Co. And LeanIn.org’s Women in the Workplace 2022 report found that women leaders are changing careers at the highest levels known as the “Great Disruption.” This leads to very few advancements to senior management: only 87 women advance from entry-level positions to 100 men.
It is not wise to lose the views and contributions of 50% of the population. Not for business, not for gender equality, and not for corporate governance. It also sends a damning message to future generations of female leaders. It does nothing to address the gender pay gap, which averages more than 10% for OECD countries.
Not only are boards diverse, but they can also prove that women have the same influence as men and don’t just represent add-ons – a trend dubbed “fig leaf feminism” by researchers at the University of Technology Sydney and the University of Alberta. . Women directors should be allowed agency, their skills and knowledge to be used and their opinions heard. In this way, companies can have a greater say and influence on how they achieve gender balance at each executive level. Boards should also give more space to female appointees. As women hold more seats, a study by the researchers found that it doesn’t equate to an actual increase in the number of women, with the same names sitting on multiple boards.
In order to track how companies are building a strong pipeline of female talent, we need to start keeping a close eye on women moving into CEO positions – COO, CFO, CIO/CTO positions. Much of this is already being done: HESTA, Australia’s A$68 billion ($46 billion) superannuation fund, has been leading an initiative to get companies to work towards the 40:40 vision to achieve gender-balanced executive teams by 2030. Change is asking men in power to stand with women and promote gender equality in leadership.
And, as much as I hate to say it, do women have to be hungry to reach the top? Since Sheryl Sandberg’s seminal book 10 years ago, the lean argument has been shown to be flawed, but perhaps more ambitious would not go amiss.
That’s important when women leaders are still struggling: They’re more likely to question their judgment and often do work that’s not recognized or valued. Their appointment to leadership roles is considered too risky.
Nurturing more female leaders can also see flexibility as more acceptable. This point is particularly relevant since the epidemic has shown that women are taking on more childcare and family responsibilities. This is where companies need a mindset change: they need to stop stigmatizing women as heroes and asking for flexible work. Or as Kate Luzio, founder and CEO of women’s networking platform Luminary Legacy LLC, recently put it: “Women are recognized by performance, and men are promoted by talent.
There’s a long way to go to deepen the shallow pool of female CEOs, and that’s why we need to start examining gender diversity at the executive levels to reach the day when many (many, many) companies are led by Jane Fraser and Valerie. Baudsons. And when they fail to make an event, it stops making headlines.
More from Bloomberg Commentary:
• Female CEOs are rare in the industry: Brooke Sutherland
• Sandberg’s Underrated ‘Lean In’ Legacy: Sarah Greene Carmichael
• On loan from Hong Kong Old Boys Club: Matthew Brooker
This column does not necessarily reflect the views of the editorial board or Bloomberg LP and its owners.
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