Women are taking their rightful spots in American boardrooms in Fortune 1000 companies across the country, but progress is slow. In 2015, 18% of board members in Fortune 1000 companies were women. In 2016, women held 20.2% of board positions (registration required) in Fortune 500 companies – up from 10.2 % in 1996.
This information tells us that companies across the United States are making progress addressing gender parity in the boardroom and in leadership in general, but we still have a long way to go.
In April, the founder and CEO of Salesforce, Marc Benioff, announced that the company was doing its part to change that. In an interview with CBS News, Benioff stated, “We saw in our company a lot of meetings where there were just men … I would look around the room and I’m, like, ‘This meeting is just men. Something is not right.'”
Even newer and more innovative companies are struggling to diversify. In 2012, protesters demanded that Facebook add women to its board when the company went public without any female board members. Facebook shareholder Anne Sheehan noted in a letter to CEO Mark Zuckerberg that Facebook’s action was strangely conspicuous in a time when “[there is] clear evidence that companies with diverse boards perform far better than the companies with more homogenous boards.”
Research shows this to be true: A recent analysis from 2020 Women on Boards found 55% of companies that fell off the Fortune 1000 index had one or zero women on their boards. An analysis from Harvard’s School of Public Health ranked Fortune 500 companies by number of women directors present on their boards and found those in the highest quartile had a 42% greater return on sales.
Why Diversity Matters
Diversity in American boardrooms matters. The “boys clubs” of days past are fading into obscurity — and for good reason. The same Harvard analysis above concluded that diverse boards tend to perform better because they are more likely to mirror their customer and client bases. This helps produce better purchasing and buying decisions.
In the hospitality industry, for example, women make up a large portion of both employment and consumerism, so it makes sense to have commensurate representation in the boardroom. Travel companies can make better-informed decisions to serve their customers and provide top-quality service with more women on hospitality boards. Travelzoo, for example, boasts a board of directors that’s 80% women.
Why The Conversation Matters
Despite progress in female executive leadership, stereotypes and gender bias continue to pervade the American workplace. According to a study from Catalyst, a women’s advocacy group, men’s perceptions of women in the workplace can starkly differ from the reality. For example, decision-makers may apply old stereotypes to corporate leadership: Women “take care” and men “take charge.” Corporate leaders may subconsciously believe women are relatively poor problems solvers, so they could skip over women for promotions and executive positions.
The simple act of hiring women into leadership positions isn’t enough to eliminate stereotypes. Exposure to female leadership is a valuable step in better serving customers and the workforce, but organizations must take other proactive steps to banish stereotypes and biases in the workplace.
As outlined in the above-mentioned Catalyst study, The Georgia Pacific Corporation, for example, addresses the inherent bias in the male-dominated manufacturing industry by issuing a “Women of Achievement Award.” This allows the company to showcase the innovations of women, which is an effective method for counteracting any stereotypical beliefs about women in the sector.
Your Call To Action
What can women do to get board positions?
• Start young. Women early in their careers can participate in company activities, meet and network with older colleagues and board members, and start out on nonprofit boards.
• Think globally. Travel experience, foreign language fluencies or experience with international business are all aspects a board member should consider integrating into their skill sets.
• Have a board CV. Different from your career resume or CV, a board CV offers a short summary of skills and experiences relevant to the board.
• Have an online presence. Use websites like LinkedIn to connect and network with others in your field.
Creating a more diverse boardroom is essential, but so is addressing the inherent stereotypes that drive male-dominated executive leadership in the first place. Companies must work to objectively evaluate worker performance, showcase female innovation and educate individuals about quashing the stereotyping process.
We cannot ignore the fact that gender bias in the workplace exists. We are truly working toward gender parity when we address the underlying cause and spark a conversation about diversity in the boardroom.
By Frances Kiradjian
In the this excerpt, Lutoff-Perlo, who now serves as Vice Chairman of External Affairs for the Royal Caribbean Group, discusses how networking and building relationships with colleagues who were at least one to two levels above her at work led her to her dream role.
Have you felt a bit dated lately after glancing around your meetings or Zoom calls? It’s not the video filters or unfamiliar slang; it’s your colleagues. Gen Z employees are poised to surpass Boomers in the workplace this year.
On this episode of The McKinsey Podcast, McKinsey senior partners Alexis Krivkovich and Lareina Yee talk with global editorial director Lucia Rahilly about the 2023 Women in the Workplace report—and specifically, the newest research on where progress is happening, where it’s not, and what leaders need to do differently to accelerate the pace of change.