Hiring, retaining, and promoting women to the highest levels sets companies on a more prosperous path.
A March 2023 USA Today headline asked: “Who has power in Corporate America? Men Do. New data shows women vastly outnumbered at the top.” Likely no one needed new data to prove this, least of all Jenna Fisher, a leadership advisor with Russell Reynolds Associates, who interviewed 25 highly successful women for her recent book, To the Top: How Women in Corporate Leadership are Rewriting the Rules for Success. What’s true for the U.S. is true around the globe. According to the S&P Global Broad Market Index, women CEOs comprise only a 5.4% share of the 8,000 companies indexed. The gender gap remains a huge chasm and closing that fissure can, according to the International Monetary Fund , increase economic output by an average of 35%.
When it comes to individual company profitability, a recent McKinsey study of global workplaces showing the importance of hiring diversity, found that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile. In addition, companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30. While well-publicized statistics and heightened awareness of the issue may make the timing right, what can companies do to close the gender gap, increase the promotion and retention of women, and keep them on the path to success? The answer, Fisher says, is not about asking women to change. “Women are leaning in so much we’re about to fall over,” she says. Instead, companies need to fix the root cause of the issue: systemic barriers and biases. Fisher suggests the following practices based on her global research:
1. Achieve critical mass on leadership teams.
Achieving true diversity at the top is not just a question of elevating a lone woman to a male-heavy leadership team. Fisher highlights the story of Petra Axdorff, CEO of BAMA Gruppen AS, Norway’s leading distributor of fruits and vegetables, who said organizations should aim for at least three women. “Only one, and the woman becomes captive to the majority and their way of thinking. Just two and they are still isolated and less able to influence the whole. With at least three, there can be a diverse team that will be better for everyone. While Fisher believes companies should ultimately shoot for full gender parity, she adds that “at least when there are three women, other women, particularly those who aspire to lead, can see themselves in that role.”
2. Democratize access to CEO “feeder roles.”
RRA’s research shows women hold just 9% of CEO seats at the 100 largest companies in the S&P 500. Too often, women don’t make it into this key role because organizations typically look for people who have previously held a COO or CFO position or had P&L leadership. The challenge is that these roles are still disproportionately held by men (today, women hold just 18% of CFO seats, 10% of COO seats, and just 20% of P&L leadership roles, according to RRA). As Fisher explains, organizations that are serious about accelerating diversity at the top need to be more intentional about democratizing access to these critical stepping-stone roles by giving women leaders more operational responsibilities early on in their careers.
3. Question definitions of great leadership.
Leadership is changing rapidly. Fisher says the days of the “hero CEO” who ruled by “command and control” are now over. She points to RRA’s research of thousands of role specifications that shows demand is increasing for leaders who are more inclusive, purpose-driven, adaptable, and able to cut through complexity. “The leadership traits that worked in the past will not help your organization in the future, so it’s even more important to challenge our assumptions and biases of what great leaders look like,” she says. One way of doing this is to consider using blind resumes (which include no name, photos, or details about gender or race). Fisher highlights the famous “orchestra auditions” by Harvard University found blind interviews increased women auditioners’ odds by 50%.
4. Create a work culture where women can succeed.
As former CEO of WW International Mindy Grossman told Fisher, “It’s one thing to say you want more women in the C-suite, it’s another thing to provide the support that’s needed to help them achieve and continue to move forward. If you really want to attract and retain the best and most diverse talent entering the workforce, you have to invest in the support mechanisms that are going to empower people to be in those jobs and excel.” The goal should be to create workplaces where everyone has the psychological safety to bring their whole selves to work, says Fisher. So, while building diversity targets into hiring decisions, and tethering managers’ hiring and retention success to their bonuses, are critical steps on the path to parity, organizations must also ensure they are creating a cultural sense of belonging, she adds.
5. Normalize paternity leave.
Among developed countries , the U.S. is the only one that doesn’t have a mandated family leave policy. As Fisher points out, in most heterosexual two-person households with children, the woman is typically younger than the man (on average 2.5 years) and likely earning less money. So, anything that has to do with the children often falls to the wife/mother. Companies need to create a culture in which men “feel no friction about taking time with their families. Otherwise, they’re sending the indirect message that ‘home and hearth’ is up to women alone to manage. But companies shouldn’t just do this for the benevolence of society. Happy employees stay longer and are more productive.”
6. Create “returnship” programs.
Fisher suggests people and organizations “think about careers as webs and not ladders. Employees should feel safe to walk and not run at certain points of their careers and companies should allow longer periods of time for employees to reach milestone markers.” If, for example, a woman (or a man) takes a career hiatus and comes back to the firm, companies should offer skills training, essentially an internship for those returning. She cites the example of Cognizant, an IT services multinational based in New Jersey, which sponsors a 12-week paid “experience” for technology professionals who have been out of the workforce for at least two years. The company will then consider supporting someone who has gone through the program for any open positions.
It Takes a Team
Women have struggled for years to make changes in the workplace, which as Fisher points out was designed for men. At the board level, progress is incrementally slow. Globally, according to a Deloitte publication that looked at women in the board room, the worldwide average of women on boards is 19.7%, an increase of just 2.8 percentage points since 2019. It concludes, “if this rate of change were to continue every two years, we could expect to reach a level approaching parity in 2045.” On one positive note, France, which has the highest levels of women on boards in the European Union (second to Iceland with 46%), enacted the Rixain Act , which sets quotas for corporate management bodies. By March 2027, women must hold at least 30% of the managerial positions and 30% of seats on the governing bodies of corporations of 1,000 or more employees.
Companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30.
Gaining parity, equity, and fair treatment at any corporate level including the C-suite cannot be up to women alone. Everyone has a role to play in making change happen. One example of this is by being intentional about sponsorship programs that match high-potential women with successful leaders (male and female). As Fisher makes clear, “while women generally have a lot of mentors, they also need influential people who will champion them internally and externally.” After all, many women, no matter how accomplished, Fisher says, don’t have the self-confidence or belief they can succeed. (As Harvard Business Review reported in 2022, the vast majority of the women interviewed for its report “raised confidence (or lack thereof) as a central factor obstructing their own and other women’s career progression.”)
Fisher points to an April 2021 Glassdoor study showing that 73% of women said they did not ask for a raise during the pandemic, compared with 58% of men. Women believe they have to “tick all the boxes, but no one is a purple unicorn,” Fisher says. “No one is perfect. Women are amazing; they’re solving many equations simultaneously, but they may need a bit of extra encouragement.” Directors and managers should help their direct reports tackle the remuneration question so women can become better at “the art of the ask.” The more they do so, and as they rise through the ranks to senior executive levels, the more comfortable they’ll feel in negotiations.
How the executive search industry can foster change
As a leadership advisor for over 20 years, Fisher says the industry can (and should) have influence and power. “Often, we talk about executive presence and whether a person seems like they fit the bill. We need to look deeper.” When researching candidates, she says to “make sure you’re talking to 360-degree folks. I won’t put someone forwards unless two of their references are people of color and women. I want to make sure this candidate can work well with everyone.” She also stresses that leadership advisors need to be open-minded. When companies talk about diversity, ask what they count as diverse. Every company defines it differently, says Fisher, “There’s a war for talent out there and it’s in your best interest to help organizations find the best employees. And if companies want the best employees, they have to have the best policies. They can no longer exclude people. New employees coming into the workforce won’t put up with what older generations once did.”
And Fisher adds: “We still have a mountain to climb before we achieve true parity in business. But it’s also clear that we now face the opportunity of a lifetime to fast-track progress and accelerate the stubbornly slow trajectory of change. Women are now standing on the most solid foundations for success than ever before. It’s time to grab this opportunity with both hands.”
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