First printed in USA Today Magazine (January 2022)
The pandemic manifested a variety of setbacks and challenges in corporations with employee burnout and staffing shortages being rampant, especially among front-line service industry workers. Between April and August 2021, a record high 16 million workers quit their jobs. And women are quitting their jobs at an even faster pace than men, according to data from payroll services firm Gusto, which focuses on small businesses (Source: CBS News). So let’s take a closer look at what is happening, the challenges and five ways to increase the demand for female executives.
WHAT IS HAPPENING?
First, let’s do a reality-check with some important numbers and trends. Did you know that white men only make up 35% of the US population, yet they held 86% of the Fortune 500 CEO positions in 2022? In comparison, women now only make up 8.8% of those who are now Fortune 500 CEOs (1% are women of color). And only 1% of the Fortune 500 CEOs are African Americans, 2.4% are East Asians or South Asians, and 3.4% are Latinx, making the need for diversity even greater.
The simple and outrageous fact is that the higher up in the corporate ladder, the fewer women occupy these seats of influence. A 2020 analysis by Mercer of over 1,100 organizations across the world found women lacking in senior leadership roles:
Executives: 23%
Senior managers: 29%
Managers: 37%
Professionals: 42%
Support staff: 47%
The 2022 Women In The Workplace report from McKinsey and Co. states that, women continue to face a “broken rung” at the first step up to manager: for every 100 men promoted to manager, only 87 women are promoted. As a result, men significantly outnumber women at the manager level, which means there are far fewer women to promote to higher levels. The broken rung likely explains why representation of women at the senior manager, director, and VP levels has improved more slowly than the pipeline overall.
An over-correction versus a balanced approach to this problem is needed now because corporations have been unbalanced for decades. There has never been “equal pay for equal work” and fundamentally women (and even more so for women of color) have less leadership opportunities than their male counterparts. In 2021, women earned 88% of what men earned in managerial positions.
In an New York Times Q&A with Ex Pepsico CEO, Indra Nooyi who led the company for 12 years, stated that, “the one thing that I wish was more front and center is how we support young-family workers and enable young women to create families and engage in their work.” In a Fortune interview she said that "one of the biggest emerging-market opportunities we have in the U.S. is women. All of us have to worry about why the pipeline is broken beyond the entry level.”
With overwhelming evidence that these J.E.D.I. issues (corporate social justice, equity, diversity and inclusion) are still quite prevalent in businesses today, we need a major shift in the leadership status quo by finding new solutions – starting with new ways to increase the number of female executives in the United States.
4 J.E.D.I. CHALLENGES FOR WOMEN
What are the primary injustices, inequities, uniformities, and exclusions women are facing in most corporations that need to be addressed? The same ones that have been permitted to persist for way too long are lingering and creating employee dissatisfaction.
Injustice: Sexual harassers and abusers do not lose their jobs due to many instances not being reported or investigated.
38% of women have experienced sexual harassment in the workplace according to a 2018 Stop Street Harassment study.
Inequity: No uniform US policy for maternity leave – forcing women to choose between their career and raising a family.
In the Women in the Workplace report, “42% of women who identify as mothers of young children who are gender Onlys in their team or department reported being concerned with working remotely more often than others because of having to work harder to get noticed.”
Uniformity: Women diversity not being appreciated as the right mode of leadership for most corporations.
In the Women in the Workplace report women are setting a new standard for leadership, “taking more action to support their teams, from helping employees manage their workloads to checking in regularly on their overall well-being. Senior-level women are twice as likely as senior-level men to spend substantial time on DEI work that falls outside their formal job responsibilities, such as recruiting employees from underrepresented groups and supporting employee resource groups. And women leaders are more likely to be allies to women of color.”
Still, another study from the Strategic Management Journal reports that “stock in a company drops after the announcement of a female CEO, but not after that of a male CEO.”
Exclusion: Women voices and inputs muted or routinely ignored during crucial meetings and decisions.
Forbes reporting states that “over the past decades, scientific studies have consistently shown that on most of the key traits that make leaders more effective, women tend to outperform men. For example, humility, self-awareness, self-control, moral sensitivity, social skills, emotional intelligence, kindness, a prosocial and moral orientation, are all more likely to be found in women than men.”
Survey results of over 240,000 men and women across the globe in Work With Me: The 8 Blind Spots Between Men and Women In Business by Barbara Annis and John Gray reveals that "eighty-one percent of women say they feel some form of exclusion at work, while ninety-two percent of men don't believe that they're excluding women."
5 WAYS TO INCREASE DEMAND FOR FEMALE EXECUTIVES
It’s time for transparent and purposeful action to correct a past of tremendous toxicity and inequity towards women. For corporate America to deliver on a promise for gender equality, here are five ways to increase the demand for female executives:
Balance the Boards with at least 50% Women: The numbers don’t lie. And the numbers state clearly that only 44 of the Fortune 500 companies currently have women leaders at the helm. Publicly traded corporations should be required to maintain a board of directors that is at least 50% comprised of women leaders. By setting this requirement, downstream decisions, mainly – who is running things, what things matter, and how they are measured, will be enhanced by greater diversity of thought, experience, and perspectives around the boardroom table. This change should not have to wait until current board member retires either. Instead, it should be voted on at the next shareholders meeting, ratified, and executed ASAP.
Break Barriers for Female CEOs: As the current generation of CEO’s runs their course, boards in Fortune 500 companies should institute a moratorium on hiring white men for the next 2 CEO cycles (average CEO tenure being 11 years). Just as President Biden made a strong statement when he declared that his Vice President would be a woman to break barriers and have his team represent America’s diversity, companies should do the same. And while women hold almost 52% of all management and professional-level jobs worldwide, American women lag behind men in terms of being in senior leadership positions (and it is far worse for women of color and those in less developed nations.)
Prepare the Head of HR to be CEO: In 2022, 70% of the Fortune 200 all Human Resources Heads were women, compared to 32% of Chief Marketing Officers, 28% of Chief Financial Officers, and 19% of Chief Information Officers. Since HR Director is the only C-suite position to be dominated by women leaders, this presents a unique opportunity to begin grooming these seasoned executives for the top leadership roles in the organization. This strategy will require a mindset shift for what is a typical CEO to a more inclusive definition that values the people expertise of Human Resources professionals.
Change the Composition of the Executive Team: Just as corporate boards need to be balanced, executive teams should be reformulated to include far more woman representation across a wide variety of functions. This change means that women leaders will need to be groomed earlier in their career in multiple operational positions such as Finance, Marketing, Sales, Operations, IT, Supply Chain, Investor Relations, Corporate Communications, Ethics and Compliance, Purchasing, Regulatory, Quality, Research and Development, Manufacturing, Legal, and more. The fact is that there are many seats on a well-functioning executive team. The future pipeline for these executive opportunities should be tilted disproportionately in the favor of women leaders.
Build a Talent Pipeline for Women Senior Leaders: More women on boards, more women CEO’s, and more women executive team members will require a swift replenishment of up-and-coming women leaders. There should be a fast-track management program in every company that focuses explicitly on providing developmental experiences for women to both recruit women into leadership programs and have opportunities to go beyond middle management positions faster than ever before. Women should be paired with other high-level women leaders as mentors and coaches and given the opportunity to learn on-the-job versus having to perform perfectly to gain opportunities.
There is no acceptable excuse for this continued inequality for women in America. In this J.E.D.I. age where many claim to support “corporate social justice, equity, diversity, and inclusion.” It’s time for more diversity at the top. People will no longer be placated with lip service. Only dramatic progressive action will do. The longer corporations have mostly white male leadership teams, the faster employees will continue to check out, customers will exit, communities will erode, and the environment will degrade.