Only 15 out of 300 US companies have women as CEOS, according to the Wall Street Journal annual pay survey released last week.
Apparently there is cause for celebration that Marilyn Hewson, CEO of Lockheed Martin, reached No. 11 on the list, with annual compensation of $33.7 million. Kudos also to Carol Meyrowitz, CEO of TJX, who ranks No. 21 on the list, with $28 million in compensation for running the parent of TJ Maxx and Home Goods.
Though this is progress from years past, the top CEO earner, Michael Fries of Liberty Global got a nearly 140% raise in compensation to $112.2 million this past year. Hewson earned 30% of that total.
That is not even on par with the gender wage gap estimates of women earning up to 78 cents per dollar compared to their male counterparts.
As a business school professor at Northwestern’s Kellogg School of Management, I understand the gravity of educating future cohorts of the world’s next CEOs. In a recent class I taught on international strategy, women outnumbered the male students 2 to 1, for the first time. This rare occurrence prompted me think harder about where are the missing women at the top and what would it take to fill the gender gap? Where are the missing women at the top and what would it take to fill the gender gap?
Female MBAs currently represent on average 36% of their graduating class according to AACSB (Association to Advance Collegiate Schools of Business) statistics. So isn’t is logical that female CEOs would be the norm and not the exception?
Certainly it takes time to rise to the ranks of CEO in a company—20 years or more. So the students in business schools today will likely be reaching the pinnacle leadership role of a company optimistically by 2035 or later.
But female professional school grads surpassed their male counterparts almost two decades ago. So where have all the women gone?
Some believe that women are simply opting out of careers to have families. I have not seen much evidence to support the case among graduate school women likely to be CEOs. Many of the young, ambitious business school students I teach are planning for both careers and families.
In order to climb the corporate ladder to the top, some women adopt coping strategies to work against these biases which is fatiguing. Take for example the prove-it-again bias where women are expected to repeatedly show more evidence of their competencies than men before others believe they are fit to lead. The expectation of doing more to be perceived as equal can also take a toll over time on the number of women leaders because they are often overlooked as being ready to lead. Others are lost due to a lack of strong mentorship and sponsorship from colleagues. To close the gap, we need more than women supporting women.
Other pathways leading to the dropping off of our future female leaders are possible career “glass cliffs.” Leadership research shows that frequently companies tap women to lead during times of crises, which are inherently more risky opportunities because of the higher likelihood of organizational failure, being evaluated more negatively, and often times used as a scapegoat to shoulder the blame. This dynamic is one to be aware of when taking on career moves that may lead to the top or derailment.
To close the gap, we need more than women supporting women. We need the championing efforts of men: According to one study, male CEOs with daughters pay their female employees in the work place better than those executives without children or sons.
We also need to educate our daughters on how to negotiate better pay. Getting the right compensation package requires knowing what to ask for going into the negotiation.
Finally, Americans might take a lesson from global companies on how to get more gender-balanced representation. Other countries have achieved gender diversity more quickly through legal quotas (most recently in Germany), though the effectiveness of this approach can result in resentment and backlash.
But getting more women into the top roles pays off for everyone. Managing diversity is a particular strength of female leaders. In my own research with Katherine Phillips and Nicholas Pearce, we examined national leaders in 139 countries from 1950—2004 to study the relationship between which leader was in office and the country’s economic growth.
Increased levels of ethnic diversity within a country is correlated with negative economic growth where conflicts between groups, inequalities, and social exclusion take a toll on more diverse societies. However, when we statistically compared the observance of female versus male leaders in highly diverse populations, we found that female national leaders get better performance outcomes.
Take for example the Central African Republic (CAR), ranked among the top 20 countries for having many ethnic groups’ interests to balance. Last year, this war torn country overtaken by ethnic strife and conflicts between groups appointed the first female president of the country, Catherine Samba-Panza, because of her leadership abilities to bring peace, reconciliation, social inclusion, and restore democracy in the country. These traits are all associated with women’s leadership styles, more so than men.
Having a female national leader in a highly diverse country, such as CAR, is associated with a 6.6% increase in GDP growth, the subsequent year.
And that bonus applies to companies as well as countries; a January McKinsey Diversity report demonstrates that firms with more gender diversity are more likely to outperform their industry peers, on average, by 15%.