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Gender Parity in Corporate Leadership: A Work in Progress

For years, studies have shown that gender parity in companies—and particularly gender parity in leadership roles—correlates with increased functional diversity within management, greater effectiveness in staff performance, and decreased discrimination.1 All of these factors impact the bottom line by leading to greater productivity and profitability.2 And while correlation does not equal causation, at the very least, companies that commit to diverse leadership are more successful.3 Yet despite the many accomplishments of women leaders in other industries over the last year, including the first woman U.S. Army infantry officer4 , the first full-time woman coaches in the NFL5 and NHL6 , and of course, the first woman to win a major political party’s nomination for president, gender disparity in corporate leadership remains all too common.   

In 2016, the Harvard Business Review published an article titled “Firms with More Women in the C-Suite Are More Profitable.”7 The article demonstrated the financial benefits of gender parity in leadership positions but went on to explain that, despite these benefits, prominent female corporate leaders such as Marissa Mayer, Sheryl Sandberg, and Indra Nooyi are exceptions to the rule. Indeed, the article noted that, among 22,000 firms globally, almost 60% of firms had no female board members, just over half had no female C-suite executives, and fewer than 5% had a female CEO.8    

Since 2015, consulting firm McKinsey & Company and nonprofit LeanIn.org have partnered to publish the annual “Women in the Workplace” study,9 which provides a comprehensive analysis of “the state of women in corporate America.” The 2016 study compiled research from 132 companies across North America employing more than 4.6 million people. Additionally, more than 34,000 individuals also completed a survey regarding their experiences with gender, opportunity, career, and work-life issues.

The survey identified two emerging themes. First, “on average, women are promoted and hired at lower rates than men, so far fewer women become senior leaders.” Second, “[a]t more senior levels . . . women shift from line to staff roles, so very few end up on the path to becoming CEO.”10 Among other things, the study also found:

  • Attrition rates were approximately the same for women and men overall and did not correlate to the disparity between the genders in higher-level positions.11
  • For every 100 women promoted to a first-level management position, 130 men are promoted.12
  • At every level, companies hire fewer women than men from outside the company.13
  • At senior levels, women tend to shift from line roles to staff roles, so that women hold only 20% of line role positions once reaching the senior vice-president level. Notably, in 2015, 90% of new CEOs (partaking in the study) were promoted or otherwise hired from line roles, and 100% of them were men.14
  • While women are now lobbying for promotions at similar rates as men, they are, on average, less likely to win promotion. Moreover, women who negotiate for promotions are 30% more likely than men who negotiate for promotions and 67% more likely than non-negotiating women to receive feedback that they are “intimidating,” “too aggressive,” or “bossy.”15
  • Managers are more hesitant to give difficult feedback to women because they are concerned about triggering an emotional response from women.

Fortunately, the “Women in the Workplace” report also provides a “road map to gender equality,” which highlights four changes that companies can make to increase gender diversity:

1.      “Make a Compelling Case for Gender Diversity” 16

In 2012, 56% of companies reported that commitment to gender diversity was a top priority for their CEOs. In 2016, the response to that question increased to 78%. Nonetheless, only 62% of senior leaders said that gender diversity is an important personal priority. And regardless of whether gender diversity is a priority, leaders do not encourage dialogue on the topic. “Women in the Workplace” encourages giving employees more information, which will help them understand what is and is not working in the company’s efforts to achieve gender equality. This policy is intended to both educate and engage employees.

2.      “Ensure that Hiring, Promotions, and Reviews are Fair”17

Only 46% of companies require a diverse slate of candidates in making hiring decisions, and even fewer companies require diverse slates for internal promotions. Moreover, while 93% of companies claim that they use clear and consistently applied criteria in evaluating performance, only 56% of employees believe this to be true in practice. “Women in the Workplace” encourages companies to review their policies for hiring, promotions, and reviews in order to reduce bias. One suggestion involves implementing blind resume reviews—a practice used by only 4% of companies.

3.      “Invest in More Employee Training”18

Fifty-one percent of middle managers and managers report that they don’t know how to improve gender diversity. Only 67% of companies offer employee bias training for hiring, and 56% offer training for performance reviews. “Women in the Workplace” explains that “[a] lack of knowledge leads to a lack of action.” To see results, companies should invest in training for all levels of employees.

4.      “Focus on Accountability and Results”19

Only 44% of companies set internal pipeline targets, and fewer set targets for external hiring and promotions. Moreover, only 40% of companies report that they hold their senior leaders accountable for performance against gender metrics. Further, while 91% of companies track gender by level, only 58% track salary differences by gender, 34% track bonuses by gender, and 15% track assignments on high-visibility projects by gender. “Women in the Workplace” encourages companies to place more emphasis on accountability by tracking. When a company sets clear targets, it makes progress easier and more likely to occur.

Despite the sometimes bleak statistics, prominent groups are taking action to change the landscape. On March 7, 2017, the eve of International Women’s Day, State Street Global Advisors, a firm managing $2.5 trillion in assets, stood in solidarity with women around the world.20 It commissioned and installed a 50-inch-tall bronze statue of a young girl, hands on hips, leaning in, and staring down the iconic Charging Bull, a long-time symbol of Wall Street. “Fearless Girl,” as the statue has been coined, is one part of State Street’s campaign to increase gender diversity on boards.21 In addition to installing the statue, the firm sent letters to 3,500 companies asking them to increase the number of women on their boards. “Fearless Girl” has garnered considerable attention, prompting State Street CEO Ron O’Hanley to say during an interview that State Street will be looking for action, and a lack of action will result in negative consequences, including the possibility that State Street would vote against the slate of directors proposed by the company.22  

Although companies have made huge strides in the gender equality arena, and firms like State Street Global Advisors are working to keep large companies accountable, much can still be done to improve outcomes for employees and companies alike. By keeping open lines of communication, offering proper training and evaluation, and focusing on fair hiring and promotion practices, employers can make measurable gains in important gender equality metrics. Those increases matter not only from a social and moral perspective, but they can also lead to greater productivity, profit, and success.



1 Marcus Noland and Tyler Moran, Study: Firms with More Women in the C-Suite Are More Profitable, Harvard Business Review (Feb. 8, 2016), https://hbr.org/2016/02/study-firms-with-more-women-in-the-c-suite-are-more-profitable.
2 Id.
3 Vivian Hunt, Dennis Layton, and Sara Prince, Why Diversity Matters, McKinsey & Company (Feb. 2, 2015), http://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters (demonstrating that “companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.”).
4 Reuters, Meet Kristen Griest, the U.S. Army’s First Female Infantry Officer, republished by Newsweek (Apr. 28, 2016), http://www.newsweek.com/kristen-griest-us-army-rangers-infantry-officer-history-women-grueling-453734.
5 Dan Hanzus, Bills hire Kathryn Smith, first full-time female coach, NFL.com (Jan. 20, 2016), http://www.nfl.com/news/story/0ap3000000626344/article/bills-hire-kathryn-smith-first-fulltime-female-coach.
6 Coyotes hire Dawn Braid as NHL’s first full-time female coach, Sports Illustrated (Aug. 24, 2016), http://www.si.com/nhl/2016/08/24/coyotes-dawn-braid-first-female-coach.
7 Sarah Green Carmichael, Lots of Companies Still Have No Senior Executives Who Are Women, Harvard Business Review (Mar. 8, 2017), https://hbr.org/2017/03/lots-of-companies-still-have-no-senior-executives-who-are-women.
8 Noland and Moran, supra note 1.
9 Women in the Workplace, LeanIn.org and McKinsey & Company (2016), https://womenintheworkplace.com/ (follow “Read the Full Report” hyperlink).
10 Id. at 4.
11 Id. at 5.
12 Id. at 6.
13 Id. at 6.
14 Id. at 7.
15 Id. at 12.
16 Id. at 19–21.
17 Id. at 22.
18 Id. at 23.
19 Id. at 24.
20 Bethany Mclean, The Backstory Behind that ‘Fearless Girl’ Statue on Wall Street, The Atlantic (Mar. 13, 2017), https://www.theatlantic.com/business/archive/2017/03/fearless-girl-wall-street/519393/.
21 Id.
22 Id.

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