Sector News

More women business leaders does not mean more power

September 25, 2014
Diversity & Inclusion
A new report by Credit Suisse reveals that despite an increase in female business leaders, women executives remain in support roles — keeping the bulk of corporate power in male hands.
 
The number of women on boards and in top management positions is increasing in almost every sector and country. Yet a deeper look at the data highlights a troubling divide in responsibility between women and men in leadership roles.
 
Women comprised 12.7% of global board appointments at the end of 2013, up from 9.6% in 2010, according to a report by Credit Suisse released on Tuesday about the gender gap in top business jobs. Meanwhile, female representation in senior management positions has grown to the comparable figure of 12.9%.
 
However, in all regions and in most sectors, women have a significantly larger representation in roles like human relations, public relations and legal than in operational roles. Support or shared service jobs, tend to carry less influence with the company, which translates to a shortage in power for women at the top. These findings are based on The Credit Suisse Gender 3000, a proprietary database from Credit Suisse made up of more than 3,000 companies across 40 countries and all major sectors.
 
“Women are more represented in management areas that carry less influence and have less direct P&L responsibilities,” says Stefano Natella, global head of equity research for Credit Suisse. “There is no question about it; the chances of anybody going from an operations role to CEO are much higher than from a shared services role to CEO.”
 
The reason for the shortage of women attaining operation roles is partly due to a pipeline problem, says Natella. Although women across the world graduate from college in greater numbers than men, most female students choose to study disciplines that lend themselves to more supportive corporate roles. In the U.S in 2011, 41,00 male students graduated with a math or computer science degree compared to 14,000 women. In the U.K., 17,000 men graduated with an engineering degree compared with just 3,300 women. This leads to many managers in these sectors to complain that there are simply not enough women with the required skill set to recruit or promote into operational roles.
 
Credit Suisse’s report also noted that parents are reinforcing gender stereotyping by advising female students interested in science and math toward a career in medicine and law rather than engineering. In the U.K. for example, 2% of parents think engineering is an appropriate career for a daughter versus 12% for a son. As Fortune reported previously, a significant number of women CEOs in the Fortune 500 graduated from college with a degree in the STEM field, bolstering the case for the importance of the educational background to becoming a future executive.
 
Bias during recruitment may have something to do with the shortage of women in operation roles as well, Natella added. More women work in supportive functions like HR, PR and legal which could lead to more women wanting to work in those fields in the first place. The opposite can be said for influential operational roles, where men could be more likely to recruit other men.
 
With European countries like Norway setting board quotas that mandate more female representation, there has been an increased focus on the number of women making it on to corporate boards. Credit Suisse’s findings prove the same attention needs to be on the number of women serving in influential operational roles. Still, a blunt look at the numbers only goes so far in showing progress in women breaking the corporate glass ceiling.
 
“This issue needs to move beyond a simple numbers game,” says Brian Sullivan, the CEO of global executive search firm CTPartners. “Blunt mandates around the ratios of men to women will not provide the deep-seated cultural changes required to make a long-term and sustainable difference. Companies need to look across their leadership team, geographies and business functions to ensure there is diversity, not just as an overall company, but within each division and practice.”
 
The plan Sullivan outlines sounds more than reasonable. But its results will likely take some time to show up in diversity reports like Credit Suisse’s.
 
“In a shorter time frame, it is easier to improve the level of gender diversity in boards ” says Natella. “You can just increase the size of the board and add women as part of the expansion, or replace departing board members— as their term expires— with women. It is a lot more difficult to change the composition of top management overnight.”
 
By Caroline Fairchild
 
Source: Fortune

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