Sector News

The impact of the few women in the C-suite doesn’t help women as a whole

May 18, 2017
Diversity & Inclusion

In the world of business, women still comprise a dismal percentage of corporate leadership – but those numbers are on the rise.

Last year, 2016, was a record-breaker, with 29 women serving as CEO for S&P 500 companies. That’s still a pretty pathetic 5.8 percent, but it’s getting better every year.

For the first time in history we actually have enough female leadership in corporations to complete meaningful research about their impact on companies. The fact that we have to do this research at all exposes an underlying sexism.

No one would bother authoring a study attempting to prove that there is value in male leadership.

Nonetheless, as we move ever further towards gender equality, it’s helpful to study the impact of female corporate leadership so that we can understand how to continually improve the lot of women workers.

Women working with women
One major research question is whether or not having more female corporate leadership will improve the prospects of working women in general. One would assume that having more female bosses would lead to a decrease in the gendered wage gap and more female hires – but the truth is a bit more complex.

Numerous studies have shown that having female leadership is particularly advantage for women who are already doing well at their jobs.

Research shows that a female CEO will pay other women in senior roles a higher salary than a male CEO would – and what’s more, that these firms will also outperform male-led companies. That’s because female CEOs are less likely to discriminate against women, promoting truly talented, hard-working women into roles where they can have a lot of influence and responsibility, leading to more profits overall.

Female executives
Other studies found that companies with more women on their boards are more likely to hire female executives, and that these companies are more profitable than companies will exclusively male boards. Another study of a New York ad agency found that the more female managers they had, the more newly-created jobs were filled by women.

The research is a bit more complicated when you begin to look at women in the lower wage brackets, however.

After Norway passed a law mandating that the boards of public companies consist of 40 percent female members, they found the change had no effect on women’s wages in lower income brackets, and that these companies did not necessarily hire more women.

Not always positive
In some cases, such as a study of Italian manufacturing firms, women in lower wage brackets received even lower wages under a female CEO. That’s because, while male CEOs might lump women together, giving them all an overall lower salary than their male coworkers, female CEOs were more likely to promote or demote a woman worker according to her performance.

Equality is bigger than titles
These studies show that women leadership begets even more women leadership – but that the positive impacts don’t necessarily trickle down to the lowest paid workers.

It will take more than just adding women to the equation to achieve equality – companies, and our culture at large, must shift to create more equality for women in every pay bracket.

By Ellen Vessels

Source: The American Genius

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