Gender Diversity and the Route to the Top

Through their research, Professors Rocio Bonet, Monika Hamori, and Peter Cappelli have found that major companies appear to be promoting women to top executive positions quickly to appease stakeholders, but are struggling to make full-scale organizational change. Here, the authors look at what companies can do to nurture and promote female talent rather than using symbolic quick fixes.

There is a general perception that women fare worse than men in various aspects of their careers and this is especially the case in their access to leadership and top executive roles. For example, women hold only six percent of the CEO positions in the Standard & Poor’s 500.

The differences in male and female career advancement are driven, in part, by the stereotypes held of women by those who make decisions about appointments to top executive positions. Managerial and executive roles tend to be perceived as masculine jobs for which women are considered less suitable. The differences are also driven by in-group biases: that the men making decisions on promotion or hiring into the executive ranks prefer candidates who are similar to them, that is, other men.

In our research, “Gender differences in speed of advancement: An empirical examination of top executives in the Fortune 100 firms,” we examined the differences between men and women’s route to the top echelons, specifically how long it took them to reach their top executive positions. In other words, we answer the question: Did female top executive incumbents reach the top faster or slower than their male counterparts?

We look at advancement into the ten highest executive positions in the Fortune 100 companies, the largest corporations in the United States. About 18 percent of these positions were filled by women in 2011, which may seem like a small number, but it represents a huge increase since 1980 when there were no women in these ranks. Interestingly, we find that women executives secured top executive positions faster than men: about two years faster. This conclusion holds even if we take into account that women may have different demographic attributes, educational backgrounds, and career histories than their male counterparts, and they also hold different types of roles.

That said, our data show that they are less likely to be found in the very top tier: in CEO, Chairperson or COO roles. At the same time, women are most heavily concentrated in the lower-ranking top executive jobs that include division heads, and Executive and Senior Vice Presidents. In particular, they are most likely to be the heads of a support function such as law, HR, communications (Chief Legal Counsel, Chief HR Officer are some of the most common titles).

While the fact that women advance faster may sound unexpected for many, ours is not the only study that shows that a small group of highly capable women enjoy greater rewards than their male counterparts not only in terms of promotion velocity, but also in terms of pay.

We also find that women’s advantage, with respect to men, grows with the number of years in their careers they have spent in the organization. Women who spent their entire career with a single employer, and were therefore promoted from within, secured their top executive positions faster than the men, as well as the female executives who had shorter tenures at their Fortune 100 employer. Consider, for example, the career of Lisa Lisson, who became the president of FedEx Express Canada just 18 years after graduating from university. (For comparison, it takes the “average” top executive in our dataset 25 years to secure a top executive position.) Lisson started her career at FedEx in a marketing role and became the head of a geographical division after several positions in marketing, with increasing responsibilities.

It is much easier to achieve diversity in a few top spots than throughout an entire organization.

But our results also showed that women’s advantage is short-lived. The advantage of female top executives in terms of promotion velocity disappeared once companies already had more than one high-ranking female executive. Once there were two women among the top ten leaders in a company, women were not promoted any faster than men to top executive positions. Once there were four or more women at the top of a company, they were promoted more slowly than men.

This suggests that major companies, facing pressure on diversity from stakeholders, promote women faster to top executive positions in order to “look good.” Organizations that comply with these calls for increased diversity – that may come from customers, investors, the government, and even their own employees – gain public appreciation and improve their reputation.

The research shows, however, that organizations respond to these diversity pressures in largely symbolic ways. They make the minimum effort to appease stakeholders by appointing a few women to highly visible positions. It is much easier to achieve diversity in a few top spots than throughout an entire organization. In fast-tracking a small number of women to visible roles, companies are choosing to take a short cut in satisfying stakeholders. Overall, our findings suggest that companies can move women up faster when they are motivated to do so – but often they are merely promoting women quickly for public appearances.

What can companies do?

In our study, women who arrived at the top jobs faster, got there because they moved through previous positions quickly and skipped steps on the job ladder. This suggests that diversity at the top can be enhanced without waiting for more diverse cohorts in lower-level jobs to slowly advance.

There are many ways companies can help women advance faster, from proactively investing in their development, considering the responsibilities assigned to them, directing their career paths, and providing appropriate support and mentoring.

W.L. Gore & Associates has a similar program. The company carried out a comprehensive study to explore how women move into broad leadership roles, and uncovered the challenges women face. These challenges include building strong working relationships with men, women hesitating to promote themselves, or their concerns that taking a leadership role could interfere with their life outside work. Sponsors at Gore help women maximize their potential and provide a source of career advocacy for women. They also identify and provide support for “stretch” opportunities that women may not know about. And so that they become more effective at providing women with constructive feedback, Gore also makes its male sponsors take training.

Similarly, at the professional services firm PwC, senior-level male executives work closely with lower-ranking female colleagues and help their protégées obtain important assignments that they may not know about, get recognized and win the opportunities that can facilitate their path to become partner at PwC.

Examples such as these show that promoting women to high-level executive positions is possible – if companies are willing to put in the effort. They should. The short-term gender diversity fix of quickly placing women in highly visible positions is just that, short term. For sustained success, a company must nurture their talented female employees and promote them to the top positions within the organization accordingly.