‘I don’t think women fit comfortably in the board environment.’
‘There aren’t that many women with the right credentials and depth of experience to sit on the board – the issues covered are extremely complex.’
‘Most women don’t want the hassle or pressure of sitting on a board.’
‘Shareholders just aren’t interested in the make-up of the board, so why should we be?’
‘My other board colleagues wouldn’t want to appoint a women to our board.’
‘All the ‘good’ women have already been snapped up.’
‘We have one woman on the board so we are done – it’s someone else’s turn.’
‘There aren’t any vacancies at the moment – if there were I would think about appointing a woman.’
‘We need to build the pipeline from the bottom – there just aren’t enough senior women in this sector.’
‘I just can’t appoint a women because I want to.’
These utterly pitiful, patronising and frankly embarrassing ‘excuses’ for a lack of gender balance on corporate boards is from a 2018* UK government-commissioned report from FTSE350 Chairs and CEOs. The report challenged them to ensure at least 30% of their board members were women by 2020. Last year. It didn’t happen.
*That’s 2018, not 1952.
Is there any wonder why women are finding it hard to land the top job?
Why Businesses Need Women At The Top Table
Women are better educated and more active in the labour force than at any time in history. More and more women are in senior management roles in businesses and organisations of all sizes yet despite these positive gains, female representation in the top positions is way behind their male counterparts.
On a global scale, around 50% of working age women are part of the labour force versus 75% of men and at university level, women are outstripping men (Africa is the only continent where women get fewer degrees than men but the gap is closing every year).
In a report published by The Pipeline, a diversity and inclusion organisation in July 2020, the headline statistic was that FTSE companies with no women at board level are ten times less profitable that those whose executive boards are at least 30% female. Without female representation the average net profit margin was 1.5%. With a third female representation, that number jumps to 15.2%.
Pipeline founders and report co-authors Margaret McDonagh and Lorna Fitzsimons put numbers to the abstract. The UK economy and shareholders have missed out on an extra £47 billion in pre-tax profit. Forty seven billion pounds.
‘This is how much money could have been gained if the companies with no women on their executive committees this year had performed with the same net profit margin as companies with more than 33% female membership on their executive committees.’
The rest of the report was no less damning.
- There are as many CEOs called Peter as there are women CEOs in the FTSE 100 (6)
- In 2019, there were just 13 female CEOs in the FTSE 350
- Just 16% of FTSE 350 companies have a female Chief Financial Officer
- In the FTSE 350, women make up 19.8% of executive roles, men make up 80.2%
- 15% of FTSE 350 businesses report no women at all on their executive committees
Part of the trouble seems to be (if you re-read the garbage spouted at the top of the article) is that some men at the top of the corporate tree simply don’t care. There are some that are blind to the issue and aren’t fully aware there even is one and there are others who understand there might be a problem but seek to minimise the barriers to entry. Worse, there are some who can’t comprehend why women find these barriers so upsetting which in turn makes it all the more difficult for women to address them.
It will come as no surprise that women are, on the whole, paid less for the same work and they don’t ascend the hierarchical ladder anywhere near as quickly. This leads to a sense of disillusionment, the loss of ambition and eventually, many will opt out.
Executive coach and organizational consultant specialising in female leadership Ipek Serifsoy suggests that ambitious women have to deal with ‘more and different stresses than men do and face a very different cultural environment.’ As stressful interaction is more likely, the workplace becomes a more hostile, less safe and less friendly place and seemingly fleeting moments of disdain, distance and disrespect – often known as microaggressions (see my last blog for more on this) can lead to vastly different work experiences, many of which are negative.
So is it down to the individual or is it down to the company to ensure more women get to the top?
In truth it’s a little bit of both, but let’s first explore some of the reasons why men and women differ in the boardroom.
In 2017, the Rockefeller Foundation provided a grant to organisational consulting firm Korn Ferry to conduct research into how to create a sustainable pipeline of female CEOs, to crack the code of women’s success and to help businesses to better identify and leverage their highest-potential women leaders.
They interviewed 57 female CEOs and the results speak for themselves.
The Differences Between Female and Male CEOs
Here are six insights that illustrate the differences between male and female CEOs and why women do make better leaders.
Note: all quotes are unattributed to ensure absolute candour.
1. Women could be ready for the CEO role sooner – compared to their male counterparts leading companies of a similar size, women tend to work in a higher number of roles, functions, companies and industries. Essentially working harder and for longer to get to the same place. They were four years older and the longer runway gave them fewer years to have an impact as CEO.
‘There are still too many women in support functions. They have to prove themselves 10 times over before they’re actually given the opportunity, so their development takes longer.’
2. Women are driven by results and making a positive impact – Male CEOs, on the whole, are driven by self-promotion, power, reward and status and while many women also have those motivations, the report suggested that these traits were not enough to attract women into the top roles. Women’s drive manifests itself rather differently. They are motivated by collaboration, responsibility and scope. There is also a sense of purpose and over two-thirds of interviewees believed that the company they run should have a positive impact on its community, its staff and the wider world. Almost 25% said affecting a positive culture was one of their most important accomplishments.
‘Sure, the shareholders made a lot of money and we hit all our targets. But what else did you do? What did you do for your communities and for your people?’
3. Specific traits are essential to women’s success and in short supply – As boards look to develop the CEOs of the future, a combination of four key traits and competencies stood out as key to the success of a female CEO: risk-taking, resilience, courage and managing ambiguity.
‘When I went down to Atlanta to run that market for the company, the [male] president of the division said, ‘You are going to be fired within a year, because no one has been able to make Atlanta successful.’ I went anyhow…’
4. Women harness the power of experts and teams – The report suggested that there were far more women than men who understood that no single person can define an outcome for an entire business. In addition, female CEOs were far more likely to give credit to those who contributed to corporate success.
‘So, you go into a job, but then you have a lot more to learn. When you have that kind of humility people want to help you, and it’s a strength to ask for help, not a weakness’
5. Women don’t see themselves as future CEOs – The beginning of that sentence should be ‘despite their skills and potential…’. Of the 57 interviewed, five admitted they wanted the top job and three never wanted it but took it out of a duty of responsibility. Over 66% said they didn’t even realise it was on the table until they were told it was, describing themselves as driven by results over career advancement.
‘It wasn’t until that conversation that I even imagined anything past manager, forget CEO. I just wanted a good job with a good company. That conversation was a bit of a wake-up call.’
6. STEM, business, finance and economics are great launchpads for female CEOs – 40% of the 57 interviewed had a STEM background and 20% had a grounding in finance, economics or business. In fact these numbers are similar to their male counterparts and it enables women to build credibility in positions that require clear, definable outcomes. Interestingly, none of the 57 started out in HR, a field where women are disproportionally represented.
So, based on the information gleaned from the Korn Ferry report, what can businesses do to build a sustainable pipeline of female CEOs and help them smash through the glass ceiling?
Identify Early Potential
On some level, businesses have a responsibility to identify and develop future female leaders by providing access to operational and leadership roles in the core business functions. They can offer guidance, mentoring and development programmes. Right now it seems, the emphasis is on teaching women how to lead people and teaching men how to run a profitable business. That needs to change.
Illuminate the CEO Path
As was put so eloquently above, It wasn’t until that conversation that I even imagined anything past manager, forget CEO.’ Affirmation that the job is available is paramount and business can create new processes that involve sponsors, mentors and role models (perhaps former CEOs or executive board members, both male and female) who have the ability to recognise potential and help women to illuminate the path towards the top job.
It’s important to understand the difference between mentors – those who offer advice and encouragement – and sponsors – those who take a hands-on, practical role in managing vertical career moves and promoting future CEOs. In the report, the female CEOs regarded their sponsors as indispensable whereas those who didn’t have a sponsor viewed it as a hindrance in their career progression.
Discuss Roles In ‘Female Friendly’ Terms
A CEO job description that mentions only title, salary, responsibilities and deliverables tends not to appeal to the motivation of many potential female CEOs. The female CEOs tended to look at roles that utilised their skillsets in ways that made a positive difference by adding value to the business but also advancing something that the world, customers, or employees could benefit from.
Beware Of The Glass Cliff
There are a number of studies that suggest that women are only offered the top job when it comes associated with a high risk of failure or a state of crisis. Women tend to thrive on turnarounds and play to their strengths such as problem-solving. These types of experiences are vital for development and offer lessons that enhance one’s abilities in the long term. However, should the worst-case scenario happen, the female CEO can’t be left dangling over the glass cliff. Measures need to be in place to allow the CEO to regain their footing or else risk losing high-profile talent to a competitor.
There are ways to make breakthrough progress faster and more efficient for the glut of potential female CEOs out there. Are you one of them? Of course you are!
At Vital Minds Business Training, we run coaching, training and workshops designed to help you to break through the glass ceiling. Contact us today to find out how your business can benefit.