The environment for women CEOs is improving. According to a report released last week by the Women’s Business Collaborative (WBC) titled Women CEOs in America, more women occupy the corner office in corporate America than ever. In 1999, only two women led Fortune 500 companies; today there are 41. And 42 percent of new appointments to boards this year are women.
While the improvement is unmistakable, it hasn’t been exactly rapid, or as thorough as it could be. But Edie Fraser, CEO of WBC, sees the upticks as evidence of a growing culture change where both the public and leaders within organizations are making demands for more equity in the leadership ranks. “We’re seeing more pressure from shareholders to really get a change in leadership for women, and particularly for women of color,” she said.
For associations looking to improve representation of women in the C-suite and on boards, the report points to a number of challenges that organizations need to address. Fraser spoke on some of the key ones raised by the report.
Build a better pipeline. Many candidates for top positions leave well before they have a chance to even put in for those roles. Part of that has to do with compensation bias that nudges women leaders out the door, which in turn cascades into other divisions. “There’s more pay equity when people start, in first-time jobs,” she said. “But men tend to be much more aggressive and supported in advancement, not just in terms of skills, but also mentorship, sponsorship, and succession planning.”
Cultivate the skill sets women CEOs need. The report highlights one striking statistic: “More than 90 percent of CEOs have had significant P&L [profit and loss] responsibility prior to taking the CEO role.” For more women to enter the executive suite, more experience on finances is necessary. “Women are 27 percent of the corporate executive suite,” Fraser said. “But when you peel away at the numbers, only 5 percent are running P&L. In order to really move up to the CEO job, they’ve really got to understand running and managing budgets.”
The culture of your organization matters. For organizations that want to attract and develop more women leaders, being seen as a leader in diversity matters. Fraser said that requires paying attention to the kinds of policies that support that diversity. Pandemic-era work-at-home policies are part of that. “Successful companies that want to be the beacons for recruiting and retention, they have to show that they’re really driving change and pivoting,” she said. “Those that came out and said, ‘You have to be in the office five days a week’ are losing massive talent.” The WBC report points to a 2021 Crunchbase report that found that companies with policies that emphasize gender diversity experience higher job satisfaction and retention, among other benefits.
Boards can lead the way. According to the WBC report, nearly half of private companies in the United States don’t have a single female board member, despite findings that more diverse boards have experienced better revenue growth. The report recommends more intentionality from boards to be inclusive, and Fraser is optimistic that more organizations will do so. “There’s a sea change in boards of directors now,” she said. “We’ve seen a doubling of women on corporate boards—54 percent of the General Motors board is women. You’ll see changes not just on boards but in their power to persuade nominating committees to look at top women for CEO roles.”