First, the good news to emerge from a new Pearl Meyer proxy analysis: The number of female directors sitting on the boards of the S&P 500’s Top 200 companies is steadily rising, going from 19% in 2010 to 32% in 2020.
Among organizations in that same group, the number of boards that include at least two women has climbed from 75% in 2010 to 96% last year. The number of boards with at least three women has increased much more dramatically in that same span, jumping from 29% in 2010 to 75% in 2020.
The results of another recent Pearl Meyer survey, however, are less encouraging. The New York-based executive compensation advisor conducted a poll of more than 200 organizations in summer 2020. That survey found the number of women in executive and senior-level leadership roles sitting at 28%, failing to keep pace with the rising percentage of women serving on the boards of these same organizations. Overall, female workforce representation is at 48%, according to the same survey.
Despite such figures, more than 80% of respondents said that diversity and inclusion, gender pay equity and closing the gender pay gap were either “important priorities” at their organizations or “among our highest priorities.” That number represents an increase from a similar survey Pearl Meyer fielded in 2019, when 66% of respondents said the same.
So, why the persistent lack of female representation at the senior and executive levels?
Beth Florin, managing director and leader of Pearl Meyer’s survey and employee compensation practice, sees a few factors at work.
“In most organizations there are fewer females in the candidate pool for these positions. Females are underrepresented in STEM fields and over-represented in administrative and staff functions, which have shorter career ladders and are less likely to lead to a top executive position,” said Florin.
Statistics bear out Florin’s assertion that women remain underrepresented in STEM fields. For example, U.S. Census Bureau data finds the number of females across all STEM occupations increasing since 1970, with women making significant gains in social science occupations in particular.
But, gains in computing and engineering occupations — which make up about 80% of the STEM workforce, according to the Census Bureau — were not as sizable. For instance, women comprise roughly a quarter of computer workers and 15% of those in engineering occupations.
“There is also evidence that women are more likely to take a step back from their careers to care for children and/or elderly loved ones,” Florin said. “This may involve taking an employment break, working fewer hours and/or avoiding positions that have a high time commitment.”
Recent statistics suggest that the pandemic is driving up the number of women putting their careers on hold.
Indeed, another 275,000 women left the labor force in January 2021 alone, according to a recent National Women’s Law Center (NWLC) analysis.
That number accounted for close to 80% of all workers over the age of 20 who left the workforce that month, and brought the total number of women to leave the workplace since February 2020 to more than 2.3 million, according to NWLC. These departures also sent the women’s labor force participation rate down to 57%, the lowest that number has been since 1988, the NWLC finds.
Susan C. Keating, CEO of Women CorporateDirectors Education and Development Foundation offers a theory on why the growing number of female board members hasn’t translated to an equally significant increase of women in senior leadership and executive positions.
“We know that what gets measured gets done. And while there has been a focused and documented push to get more women on boards, that is arguably easier to measure,” said Keating.
“It’s only recently, as DEI positions proliferate within companies, and [as] measurement becomes important to investors, investment banks, other stakeholders, and bonus structures, that we are measuring more, and managing to that measurement. I know that many women board directors are demanding progress in senior-level management and, in this case, progress coming from the top.”
Organizations and their HR teams can take several steps to help expedite the process, of course.
For example, Florin suggests focusing on increasing the talent pipeline, requiring diverse slates of candidates for mid- and senior-level hires and promotions, providing flexible work arrangements (job sharing, flex hours, work-from-home options), establishing mentors for diverse candidates, getting involved in affinity-based professional organizations and setting goals and measuring progress.
For Keating, the effort starts with one word: intentionality.
“As the number of women on boards rise as companies have set specific targets and then work to meet those targets, companies are going to have to do the same with management and senior management roles,” she said. “This requires intentionality, and HR leaders, working with senior leadership teams, can drive that intentionality.”
About the Author
Mark McGraw is managing editor of Workspan.