Changes to gender representation at C-suite and board room level
Gender diversity in leadership is good for business. This we know. But it is also good for a company’s profitability.
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According to a 2022 mentoring impact report, in 2020, average year-on-year profit change for Fortune 500 companies was -59%. However, the 41 Fortune 500 companies with both women CEOs and mentoring programmes enjoyed an average +13% year-on-year profit growth, despite a global recession caused by the COVID-19 pandemic. Companies with mentoring but without a women CEO were more in line with average year-on-year profit changes, experiencing an average decrease of 56%.
- 59% decrease: average year on year profit change for Fortune 500 companies
- 13% increase: year on year profit growth for 41 fortune 500 companies with both women CEO and mentoring programmes
These numbers are persuasive, yet progress on women in leadership is slow.
What progress has been made?
A recent report examining trends in new CEO appointments to the largest companies across 25 markets globally found that only 13% of new CEO appointments between July 2021 and June 2022 were women. This compares to 11% in 2021 and 9% in 2020, which demonstrates that efforts to improve gender diversity at C-suite level are at least having an impact.
% of new CEO appointments that are women
- 2022 = 13%
- 2021 = 11%
- 2020 = 9%
There are variations across markets. From the 18 women CEOs appointed during this period, seven are in Europe, six in Asia Pacific and two in North America. In terms of CEO diversity by region, the Africa market leads on gender diversity (17%), while the Middle East (3%) and Latin America (2%) perform poorly.
In the UK, women make up around 52% of the workforce yet are still underrepresented at C-suite level – and growth is static. Statista research calculated no increase in the number of women CEOs at FTSE companies between 2016 and 2021. And despite there being almost a thousand more women in leadership in 2021 compared with 2017, 63% of FTSE 100 leadership roles that become available are still going to men, and turnover rates remain slow.
But progress has been made. The FTSE Women Leaders Review recently announced that over 40% of FTSE 350 company board directors in 2022 are women, hitting the target three years early.
However, there are significant variations in female representation across industries globally. In 2022, industries with the highest percentage of women CEOs were:
- 14% Travel and hospitality
- 12% Chemicals
- 11% Media and entertainment
- 11% Banking
The manufacturing industry has no women CEOs, while the technology and power & utilities industries also have the lowest percentage of women CEOs, with 2% and 5% respectively. In the staffing industry, 2021 data spanning 2,000 recruiters globally found that women comprise 65% of the industry but only 35% of C-suite.
Though the share of women in leadership has increased over time, women are still underrepresented in C-suite positions to varying degrees across countries, regions and industries. By addressing the barriers for women in leadership, companies can build a talent pipeline that supports more women into C-suite and other leadership positions faster.
Biases and microaggressions are common and lead some women to leave the talent pipeline
The barriers for women in leadership
Many of the structural barriers that exist for women are well known, such as a lack of women-focused leadership networks or the disproportionate burden of caring responsibilities.
Other barriers are more insidious, like unconscious bias. One report identified four barriers for women in leadership:
- Men and women define effective leadership in different ways and this misalignment creates a barrier – women value collaboration and empowering teams, while men value a decisive, direct approach. However, both genders value confidence.
- Being results-driven is not enough – studies reveal the importance of affinity and trust in leadership promotion decisions. There is a need to develop connections with people who are ‘not like us’ to help remove bias.
- Women must overcome outside assumptions about their willingness to perform more demanding roles and are less likely to put themselves forward for roles unless they feel 100% capable of doing them. For men, readiness is less tied to capability. This results in women taking longer to get to CEO.
- Biases and microaggressions are common and lead some women to leave the talent pipeline. Women are more likely to not have their opinions heard in meetings or receive a negative reaction when they display confidence – a quality valued in men in leadership roles.
Build a talent pipeline that supports more women into leadership
- Start at the top
C-suite must support getting more women into senior leadership for it to happen. Map out your vision for how you plan to diversify and discuss it with HR and your board of decision-makers. Get buy-in from everyone involved before formalising it. - Focus on recruitment and internal mobility
Implement gender-neutral recruitment processes and aim for an even gender split at recruitment. Make sure you have people of different genders taking interviews and reinforce your commitment to gender diversity to candidates. Internal development and mobility programmes are key to support, retain and advance female talent within the company. Meet the demands of diverse talent by offering flexible working options, fluid career paths, and opportunities to upskill and reskill. Create a framework for internal mobility and link this to leadership development so women have the best chance at success. - Review your workplace culture and identify
instances where biases impact behaviours Executive coaching, both individual and group coaching, can help teams and leaders identify bias and overcome problematic behaviours. Invest in additional coaching for line managers so they can support women to excel in their roles and feel psychologically safe. - Combine leadership development programmes
with inclusive leadership initiatives Do this for all genders to help build an inclusive first culture. Align these programmes and initiatives with your recruitment process and internal mobility programmes. Then integrate everything into your succession plan.
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