Written by Heather Burke Wednesday, February 01 2012
The latest statistics on women’s leadership at the top from Catalyst, a nonprofit research organization for women’s advancement in business, reveal that progress for women in corporate America has been a slow, slippery climb.
In 2007 women comprised 14.8 percent of directorships and 15.4 percent of corporate officer positions for Fortune 500 companies. Today, women make up 16.1 percent of corporate board members and 14.1 percent corporate officers for the Fortune 500.
Many agree that these numbers signal an ever-present need for a deep cultural examination and reform of the myths, attitudes and beliefs about women that play out in corporate pipelines, often holding ambitious and talented women at the margins of leadership.
While growth of women’s representation in the highest ranks of corporate leadership has dipped and lagged over time, there are promising strategies that companies can adopt to champion diversity and place women at the very top levels of decision-making power. Studies on women’s advancement have shown that cultural shifts favoring gender-diversity require a champion at the top. The companies profiled are not only leaders when it comes to gender-diversity, but are thriving in highly competitive, rapidly evolving markets.
The Sponsor Effect
Everyone benefits from having an advocate in the workplace. For a woman looking to advance her career into the C-suite, the presence of a strong advocate in the form of a sponsor — not simply a mentor — can make all the difference.
The 2011 study by the Center for Work-Life Policy–sponsored by American Express, a leader in women’s advancement initiatives–underlines the critical relationship between sponsors and advancement. It reports, “Sponsors not only promote their charges, they also protect, prepare, and push them—all the way to the top.” The study goes on to declare, “If today’s female executives find themselves outside the inner sanctum, it’s not only because they’re removed from the crucial conversations that determine who moves up, but because they have no proxy. Sponsorship corrects that.”
Intel¬, whose board is chaired by a woman, Dr. Jane E. Shaw, is shaking up its career pipeline with its in-house Extend Our Reach program. It develops senior vice presidents into a cohort of sponsors for high-performing female employees, while fostering a strong community of knowledge-sharing and support among women employees.
“Mentoring serves a very important purpose, but it alone isn’t sufficient to move great talent into leadership positions,” says Intel’s Chief Diversity Officer Rosalind Hudnell.
“When you get to the level where decisions are made about your career that are not just up to an individual manager’s decision, feedback from other leaders about whether you’re ready becomes crucial. Having a sponsor [who] can provide that broad visibility and endorsement is crucial,” says Hudnell.
Many see sponsorship as the missing link that will increase women’s presence at the higher echelons of corporate leadership. With more trendsetting companies like Intel, Cisco, Citi, Deloitte and Time Warner championing sponsorship strategies for women’s advancement, women’s climb to the C-suite is poised to continue its advance and create a far greater pool of women candidates that are ready for leadership on corporate boards.
Talent Management and Retention
A company’s work-life policies often create some of the most difficult hurdles for women to gain the career advancement and upper-level management experience necessary to join corporate boards.
In the 2010 study Off-Ramps and On-Ramps Revisited the Center for Work-Life Policy demonstrates how much women must sacrifice when they are forced to take time off from work to balance work and life. It found, “Those [women] who do return [to the workforce] lose 16 percent of their earning power and over a quarter report a decrease in their management responsibilities, and 22 percent had to step down to a lower job title.”
Companies that maintain a competitive advantage in the marketplace understand how to hold on to and promote their top-notch women talent. General Mills earned a spot in the top 10 on Working Mother’s 100 Best Companies of 2011 because of its investments in employee training, flextime, childcare and guaranteed time off for a birth or an adoption. Five of the food giant’s 14 corporate directors are women, as are 40 percent of its top wage earners.
There are many reasons why women decide to “off-ramp” and countless factors that contribute to women’s stagnation in company pipelines. Smart work-life policies increase the earning power not only for professional women, but also for the companies that employ them. They also might have the potential to begin to recalibrate systemic gender-biases in the workplace.
| In the Spotlight
Dr. Jane E. Shaw
Chairman of the Board of
Directors, Intel Corporation
Companies who do not respond to the diverse needs of their female talent are missing out not only on women’s contributions, but on profits: women’s leadership at the highest levels has been shown to increase a company’s financial performance and sustainability over time.
Companies with three or more women on their board of directors for a minimum period of four to five years “significantly” outperformed companies with “sustained” lower representation by 84 percent on return on sale, by 60 percent on return on investment capital and by 46 percent on return on equity, shows Catalyst in its 2011 report The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004–2008). McKinsey has demonstrated similar gains for businesses in its 2007 and 2010 Women Matter reports.
Corporate Governance Policies and Practices
There are 56 U.S. Fortune 500 companies that have zero women directors represented on their corporate boards. For 2010, the Alliance for Diversity – a collaboration of four leadership organizations to promote the inclusion of women and minorities on corporate boards – reports that white men held 95.5 percent of board chair positions of Fortune 500 companies.
Companies that want to keep pace with 21st century markets, socio-cultural movements and consumer demand will require progressive corporate governance policies that champion diversity at every opportunity. How can a leading U.S. corporation attempt to understand and bring innovation to a complex market without a single woman on its board of directors?
The InterOrganizationNetwork (ION), a membership-based organization dedicated to advancing women to positions of power in business, outlines in its December 2011 report, Gender Imbalance in the Boardroom: Opportunities to Change Course, immediate courses of action companies can take to ensure greater gender-diversity on boards.
ION concentrates its recommendations for change at those entities closest to identifying and electing corporate leadership: board chairs, nominating committees and members, sitting directors and executive recruiters. ION urges companies to dialogue on the issues of board composition and board tenure and require search firms to integrate more women into their pipeline of prospective directors, among other recommendations.
2020 Women on Boards, a national campaign to increase women’s share of seats on U.S. boards to 20 percent or more by 2020, helps us understand why board composition is so important: “In short, boards of directors make decisions that can impact you and a lot of other people: employees, shareholders, consumers, and communities. That’s why it’s important that corporate boards represent their various constituencies in all their diversity.”
Target is one noteworthy company that has made gender-diversity explicit throughout its business. Recognized in 2011 by DiversityInc magazine as on of the Top 50 Companies for Diversity, Target boasts five women executive officers out of 11 and 30 percent of their board is comprised of women directors. The household name also targets the integration of women and minority-owned businesses into their supply-chain.
There is no silver bullet to turnaround women’s lagging representation on corporate boards and executive-level positions in the U.S., but there is no shortage of solutions either. Moving the needle on women’s visibility and leadership throughout a company’s pipeline requires an integrated, holistic approach to diversity that takes into account the myriad structural imbalances, complex attitudes and beliefs, and policies and practices that manifest both subtle and overt forms of gender-bias and discrimination.
Keeping a focus on women’s representation and committing companies to track progress toward gender-diversity throughout their pipeline in a transparent and structured manner is crucial. We cannot fall into what Dr. Elisabeth Kelan, associate professor in the Department of Management at King’s College London describes as gender fatigue, “the phenomenon that people lack the energy to construct the workplace again and again as gender neutral despite the fact that discrimination continues to exist."
Bridging the knowledge and communication gaps between new generations of women confronting gender-imbalances in the workplace for the very first time and those women who have been weathering the highs and lows of this epic, sometimes unforgiving, storm will be a vital asset to staving off gender fatigue and moving forward on women’s representation at the highest levels of professional life.
Heather Burke has more than eight years experience working with partners in the public and private sectors to promote women’s empowerment and develop innovative investment strategies for community development. She has worked in 12 countries on initiatives spanning women's and girls’ leadership, education, income generation, social entrepreneurship, public health, food security, political participation, and environmental conservation. She is a social venture consultant based outside of Washington, D.C.