Female Execs: The New Metric
By Elizabeth Harrin (London)
There’s been a lot written about getting more women on to boards. But boards act as an oversight body. Could you even name half the members of the board at your own company? Using the number of women on boards is a useful measurement in how enlightened or competitive a company is, but it’s rarely the case that having more women on boards means that lower down the organisation women are being promoted and supported in more senior management positions.
Enter a new study – Womenomics 101. This survey, from the consultancy 20-first, looks at a different metric: women on the Executive Committee. After all, it’s easy(ish) for the corporate board to elect a woman or two and say that the job of creating gender equality is done. Much harder for a company to promote its home-grown talent up through the ranks to a position on the Exec.
“This survey invites you to look deeper into companies, and to use metrics that distinguish those serious about gender balance from the rest,” says Avivah Wittenberg-Cox, CEO of 20-first and co-author of authored the book Why Women Mean Business. She’s also the woman behind the new annual survey. “That’s what Womenomics 101 proposes to do.”
It’s the first year that the survey has been run, and the results show a huge global difference. The United States is way out in front, with an impressive 89% of companies having at least one woman on their Executive Committee. Kraft Foods, WellPoint, Macy’s, Allstate, Pfizer, and Wells Fargo top the list of companies with the most women.
European companies do not fair so well, with 68% of companies having no women on the Executive Committee. Some companies stand out as worth a mention for their balanced Execs, like J Sainsbury and SNCF, but 21% of companies just manage one woman on the team.
Given the cultural and socio-economic differences, it probably doesn’t come as much surprise that Asian companies are down at the bottom of the list when it comes to equality on the Exec. A massive 82% of organisations manage to run their Executive Committee with no women at all, and 17% have just the one. Although we should single out Cathay Financial Holdings for setting a great example in the region – it came out top when 20-first investigated the mix of women and men on the senior team.
Percentages are all well and good as an initial indicator, but the study drills down deeper. The vast majority of women who do make it on to the Exec – wherever in the world they are working – hold a support role like Legal, HR or Communications. Very few have operational positions with profit and loss responsibility.
“Companies that only manage to promote women into leadership through staff roles,” says Wittenberg-Cox, “demonstrate that they have not yet worked out how to gender balance their leadership development systems and their talent pipelines.” In other words, if they can’t get women into operational roles, they have very little chance or realising that most people who buy their stuff are women. If you can’t recognise the purchasing power that women bring to the economy, you are missing out on a growing market segment.
All of this is very interesting, but it’s hard to see why we should really care. It’s the 21st century and getting a woman on the Exec isn’t really cause for celebration, is it? Well, put your glass ceiling thoughts aside, and think about the economy. There’s a whole raft of research that shows a correlation between gender balanced leadership and improved corporate performance. More and more companies are waking up to the revolutionary idea that having a mix of styles and skills in any team has a positive impact on the bottom line.
Part of the reason we are where we are with the lack of women on Executive Committees (and boards, for that matter) is the tendency to recruit in your own image. Historically, men have been in positions to recruit, and unsurprisingly, they clicked best with people like them. It’s not an entirely masculine trait. The Womenomics survey shows that women do the same thing.
Wittenberg-Cox says that 30% is the magic number – she uses the term ‘critical mass.’ It’s the number of women on a team that actually makes a difference to performance. The survey looked at over 300 companies and only 12 of them reached the critical mass point of having 30% women on their Execs. A quarter of them are run by female CEOs: WellPoint, Kraft Foods, and Archer Daniels Midland.
Even if those female CEOs are promoting ‘people like them’ into Exec positions, it is going to be a very long time before that unconscious recruitment policy makes a big impact on the amount of women in senior roles. In the meantime, we’ll just have to look at next year’s Womenomics study and see if the world has made any progress on getting a better gender balance amongst their leadership teams.