Top Women: More CEOs, CFOs and Board Members

Over the past year, women have grabbed headlines in  every industry and every corner of the globe. In the arts, more female directors, producers and writers were able to get their work into cinemas, television and theatre. In politics, an increasing number of women won elections: South Korea, for instance, recently swore in its first female president.
The corporate world also saw firsts: Marissa Mayer broke ground when she took the helm of Yahoo more than six months pregnant.
Women breaking barriers was the conversation of the year. There was the much-discussed piece, “Why Women Still Can’t Have It All,” by Princeton professor and former US State Department official Anne-Marie Slaughter. Facebook’s chief operating officer, Sheryl Sandberg, also wrote a book, Lean In: Women, Work and the Will to Lead, which addresses how women can succeed in the face of gender barriers.
The conversation continues as to whether women will ever reach parity with men in the workforce. Though the past 40 years have seen a massive generational shift, with more women entering the workforce across the globe, more needs to be done to advance women to senior leadership positions.
Promising news
In 2012, though women comprised over a third of the workforce in the United States, they held a mere 14.3% of executive officer positions at Fortune 500 companies and only 8.1% of executive officer top-earner positions. Of the FTSE 100, women held only 15% of board seats and 6.6% of executive positions in 2012. In the Asia Pacific region, the percentage of women on boards was about half that in Europe, Australia and North America.
The promising news is that the number of women in leadership roles is growing. The Grant Thornton International Business Report (IBR) survey, which includes both listed and privately held businesses, indicates a 3% increase in the number of women in senior management positions, with 24% of businesses with women in senior management roles globally (see chart below).
Women in Senior Management, 2004-2013
Source: Grant Thornton IBR 2013
And more people are taking note that gender diversity at board and senior management positions promotes corporate growth. A recent McKinsey review of 100 companies against the Organizational Health Index (OHI) found that companies with three or more women in top positions (on the executive committee or board) scored higher than their peers.
In another study, Nancy Carter and Harvey Wagner tracked results from Fortune 500 companies from 2004 to 2008. Those companies with the most women board directors outperformed those with the least by at least 16% in terms of return on sales and 26% in terms of return on invested capital.
Nancy McKinstry, the first woman to run 175-year-old Dutch publisher Wolters Kluwer, believes that diversity drives results. She has helped draw women to leadership positions since she stepped up as CEO in 2003.
Back then, women held only 20% of top leadership posts at Wolters Kluwer; ten years later, it’s 33%. Says McKinstry: “We’ve been able to attract female talent because they see women leading different parts of the company. Diversity helps; it is a self-fulfilling prophecy.”
Asia at the forefront
The increase in the number of senior management positions occupied by women takes the ratio back up to the levels that preceded the global recession. The slump hit women disproportionately, and only now is a turnaround at hand.
Regionally, Asia Pacific leads with 29% of senior leadership positions held by women, compared with 25% in the European Union, 23% in Latin America and 21% in North America. The country ahead of the pack in Asia is China, with 51% of senior management positions held by women, compared to 25% last year (see chart below).
Top Ten Countries With Women in Senior Management
Source: Grant Thornton IBR 2013
“Women have more and more opportunities now. Their talent and intelligence are much more respected at higher-level positions,” says Mei Hui, board secretary of the China Financial Futures Exchange.  
“In my experience, the proportion of women in senior management has definitely increased over the last five years. Women’s power in China is increasing. Still, we have further to go, and it would help if companies and institutions offered more opportunities for women to develop.”
This is not the case in more patriarchal societies like Japan (7%), United Arab Emirates (11%), and Argentina (18%).
Bottom Ten Countries With Women in Senior Management
Source: Grant Thornton IBR 2013
Despite much negative press coming from India with respect to gender relations, the country might prove to be the next leader. With only 15% of the total employee base occupied by women, 42% of survey respondents said they had plans to hire more women, especially in senior positions.
“Definitely the number of women on top in banking and finance has increased. Women are getting earlier career breaks as well. Women who dropped out are being called back by their old companies. The economy is growing and the demand for good executives is ongoing,” explains Kaku Nakhate, the president and country head of Bank of America Merrill Lynch India.
Education: Leap forward
The consensus is that change begins with education. According to a recent World Bank report, there are more women than men studying in universities in 60 countries it researched.
The same report attributes the great strides in women’s participation in the labour force to increased education. Specifically in Colombia, higher education led to the steepest increase in women’s labour force participation as well as representation in senior managerial positions.
Since the early 1990s, in the United States women have been attaining bachelor’s degrees in far greater numbers than their male counterparts. According to the census, 2010 was the first year in which women earned more advanced degrees than men. In the European Union, 60% of graduates from universities in the Union’s 27 member states last year were women.
Those women who stay ahead of the game with the rapid pace of technology change will have an advantage when senior management positions open up. “You always have to be open to continually develop your skills,” advises Wolters Kluwer CEO McKinstry. “For me, getting my MBA gave me a whole tool kit.”
Creating the pipeline
Another key factor in promoting women in the workplace is talent management. According to a McKinsey report, “If companies could raise the number of middle management women who make it to the next level by 25%, it would significantly alter the shape of the pipeline.”
The problem is typically that in this mid-career space, women are leaving companies to start families, and companies need to find solutions to keep the pipeline strong.
Programmes that focus on nurturing talent are critical. Mei Hui recommends internships, apprenticeships and tailored career paths. “Men should be more supportive and more caring about the women in the workforce and create an atmosphere for mutual respect,” she explains.
In China in particular, such policies are crucial; 71% of companies surveyed in China do not offer flexible working options.
Meanwhile, in India, where 49% of those surveyed say they offer flexible working options, Kaku Nakhate says there is still much room for improvement: “There are certain infrastructural constraints that women executives who are rearing children face. Being provided flexible work hours, for example, is very important, but all companies don’t offer that.”
“Unfortunately, there are rigid mindsets, mostly male, that don’t believe in giving women opportunities or creating an environment where they can work and express themselves.”
If flextime is not available – globally only 67% of respondents stated that they offered it – there may be other ways to keep women in the talent pool. India’s Kaku Nakhate admits, “I have spent hours trying to persuade women not to quit and to take a sabbatical instead. As I said, we face drop-offs in the middle rungs, and if we can’t retain them there, they can’t rise to the top.”
Corporate talent retention policies and flexible work options are only one part of the puzzle. Women who remain in the workforce in mid-career and higher levels need to have strong support networks at home. All of the female executives interviewed stated that family networks enabled them to climb the corporate ladder, even with strong cultural biases working against them.
Top Post for Women: Finance
Women are increasingly rising to the top – 14% of those businesses with women in their senior management teams have a female CEO, up from 9% in 2012. Now, 21 of the Fortune 500 CEOs are women.
The top five positions where women enter senior management – chief finance officer (31%), human resources director (30%), corporate controller (14%), chief marketing officer (13%) and sales director (13%) – all saw increases in the number of women over the past year. As women take on greater roles in the C-suite, they’re better positioned for management to consider them for the top spot.
Click image to enlarge
Top Titles for Women in Senior Management
Source: Grant Thornton IBR 2013
A new study by the Association of Chartered Certified Accountants and the Economic and Social Research Council from Cranfield School of Management indicates that women who have a finance background find more success on the corporate boards of FTSE companies. The report states that 45% of female executive directors are financially qualified and 65% in total have a financial background.
McKinstry does caution women not to pigeonhole themselves: “Too often women will go into roles that don’t show results. They take on more support functions, such as head of human resources or head of legal, rather than a line function. If you can demonstrate results, it is better for advancement.”
The need to travel and the long hours required in senior leadership positions hold true across all industries, though some sectors see more women in top management than others. Healthcare leads the pack with 45% of women in senior management, followed by education and social services (44%), hospitality (41%), cleantech (33%) and financial services (29%).
Kaku Nakhate reveals that in India the banking industry offers a stable career for female executives: “Banks are recognising that diversity is important, as their customer universe is so diverse and half of their clients are women. So they are seeking out women, especially in front-end, client-facing jobs.”
“We offer flexible working hours and training programmes, and allow women executives to go on sabbaticals. Banks are also developing mentoring networks within that can help women executives who are facing a career problem.”
Quotas: Working but not favored
Recent research suggests that dender diversity on boards elevates companies in the eyes of investors. A recent study (Does Gender Matter in the Boardroom?) has concluded: “We find that the market reaction to female appointees is, on average, positive and significant. This suggests that the market does not perceive the appointment of female directors to be primarily motivated by tokenism.”
“Moreover, the average reaction for female appointees is roughly two percent higher than for male appointees even after controlling for other appointee characteristics, such as independence, expertise and qualifications.”
Quotas for the number of women on boards have many advocates. In France, legislation passed in January 2011 – requiring that within three years 20% of a company’s board members must be women, rising to 40% in six years – led to an increase in women directors, from 12.7% to 16.6% in 2012. In fact, almost nine out of 10 companies in France have at least one woman director.
In Australia, following passage of a corporate governance code amendment dealing with diversity, the proportion of women on corporate boards increased from 10.2 percent to 13.8 percent within two years.
Globally, 55% of the IBR respondents surveyed said that they would not support the introduction of quotas for the number of women on executive boards of large listed companies, versus 37% who would.
“Personally, I’m against quotas, because I believe in meritocracy, and that should not be compromised for the sake of filling a board seat,” says Kaku Nakhate in India. “If the woman doesn’t deserve being on the board, what would she contribute?”
“Having said that, we need quotas so that it sets a goal post for companies. In India, we definitely need regulation as women are so poorly represented on corporate boards.”
In China, 72% of respondents favour board quotas to promote women. “For governmental organisations, it can definitely help,” says Mei Hui of the China Financial Futures Exchange. “But for commercial sectors, we need to respect the market value.”
The outlook: Positive
Significant obstacles remain to reaching parity in senior leadership posts and corporate boards. In her essay in The Atlantic, Anne-Marie Slaughter explored these challenges, especially those posed by work-life balance. She sees no easy answers until there is a cultural shift recognising that women need more support.
“Expectations are higher of women,” says Wolters Kluwer’s McKinstry. “Women have to achieve better results because there are fewer of them.”
McKinstry adds that women face judgement based on the whole person, not just the company’s performance, making scrutiny of female leaders even more acute: “Women are judged on how they dress, how they look, their work-life balance.”
But she and the other executives interviewed remain positive; the seeds of change have been planted and the 2013 IBR survey shows the results.
Emerging markets in Asia and Latin America will see the greatest change in the years to come. “I really see that the younger generation will soon overtake us. There will be no glass ceiling for them. The younger generation – look at my daughter as an example – are very talented and very motivated. In the near future, they will be teaching us,” says Mei Hui.
Concurs Blanca Treviño, president and CEO of Mexican IT solutions firm Softtek: “In Latin America, the women who graduate from the universities today are going to be the professionals in five years and will look for those senior positions in 10 years. It’s not at the speed that we would like, but I do think that in 10 years, it will have improved.”
About the Author
This article is excerpted from the Grant Thornton International Business Report 2013 entitled Women in Senior Management: Setting the Stage for Growth, which is based on more than 6,500 interviews with business leaders from all industry sectors, conducted between November 2012 and February 2013. Additional in-depth interviews were conducted by Forbes Insights. This article has been re-edited for clarity and conciseness. ©2013 Grant Thornton International Ltd. All rights reserved.

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