Gender Diversity in the C-Suite

DEIDiversityCulture RiskBoard and CEO AdvisoryDiversity, Equity, and Inclusion Advisory
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January 24, 2023
10 min read
DEIDiversityCulture RiskBoard and CEO AdvisoryDiversity, Equity, and Inclusion Advisory
Executive summary
Women are still vastly underrepresented in the top leadership teams at America’s largest public companies.
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Research shows that adding women to the C-suite changes how companies think.1 Women executives impact how the C-suite approaches strategy and innovation. Simply put, women in executive leadership is good for business. And yet, women are still vastly underrepresented in the top leadership teams at America’s largest public companies.

In Russell Reynolds Associates’ analysis of the top 100 companies in the S&P500 (referred to as the S&P100 in this report), we found that men are 2.5x more likely than women to be executives in the top leadership teams. The roles in which women are well-represented are those that hold far less power and influence, highlighting the limitations of gender diversity and the perceived value of women in these organizations.

Closing the gender gap at the top remains a priority for companies as they continue to face increased scrutiny from stakeholders who demand more diversity in executive leadership. While there are currently no federal laws mandating gender diversity in executive leadership, many states have enacted legislation that specifically focuses on increasing gender diversity on corporate boards. Most notably, California became the first state in the US to mandate that public companies headquartered in the state must have women directors or face fines, up to $300,000.2 Although the law has been credited with improving the standing of women on corporate boards, gender diversity on corporate boards is not indicative of gender diversity in the C-suite.

While there is extensive research on the benefits of gender diversity of leadership and management teams, there is limited analysis specifically on gender diversity of the C-suite. For our analysis, we examined the top leadership teams—as stated by the companies themselves—of the 100 largest organizations within the S&P500. We compared the composition of those teams with the US civilian workforce participation rate by gender from the US Bureau of Labor Statistics. The size and nature of top leadership teams varies across organizations, ranging from 16 executives on average to 45 executives on the largest team and just three executives on the smallest team. A company’s disclosure of whom it chooses to state as part of its top leadership team is not only a factor of organizational structure, but also an indicator as to whom the company values and where power and responsibility reside.

By focusing our analysis on the top leadership team, we can move past the generalities of gender diversity in leadership toward a more substantive analysis of those with the highest power and influence. Principally, this avoids the blurring of leadership levels, which can result in an overly rosy picture in which progress on gender diversity at the next generation leadership level masks the real, typically more limited level of progress at the very top.

 

Key Finding 1: A long way from parity

There are 69% fewer women executives in leadership teams than there are in the US workforce. While women account for 47% of the US workforce benchmark, they account for just 28% of all executives in the top leadership teams of the S&P100. Comparably, men account for 53% of the US workforce benchmark and account for 72% of the executives in those top leadership teams.

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Source: RRA Proprietary Analysis, S&P100 Leadership Teams, 2022 (n=100 companies, 1583 executives); Bureau of Labor Statistics, 2021 “Employed persons by detailed industry, sex, race, and Hispanic or Latino Ethnicity”, https://www.bls.gov/cps/cpsaat18.htm

 

Key Finding 2: Underrepresented where it matters most

Only 9% of CEOs in the S&P100 are women. There needs to be 5.2x the number of women CEOs to be at parity with the workforce benchmark. The traditional CEO feeder roles of CFO, COO and P&L leaders show significant underrepresentation of women, which makes the path toward CEO that much more difficult. In looking at the COO role (10%), we would need to see 4.7x more women in the role to reach parity, and 2.6x more women in the CFO role (18%) to reach parity with the workforce benchmark. As a result, there cannot be measurable progress on gender diversity in the CEO role unless organizations are more accepting of variance in the backgrounds of the executives brought into the CEO role.

There are two roles in top leadership teams that are commonly occupied by women—CMO (47%) and CHRO (67%). While this shows great progress toward gender parity, not all companies include the CMO role as part of their leadership team, further limiting the value and influence of women in the top ranks. We also see promising results in the GC role at 41%, just below the workforce benchmark at 47%.

As highlighted above, the CHRO role has the highest percentage representation of women among all leadership roles analyzed. While the CHRO has always played an important role in an organization’s success, the role has only grown in significance over the last two years due in large part to the coronavirus pandemic and the ongoing civil unrest in the US. A successful CHRO helps employees feel supported and encouraged, while also leading with empathy and strategic foresight through tough cost-cutting decisions. Despite this, the path to CEO is still quite limited for those in the CHRO role. Most notable, according to Russell Reynolds Associates’ 2022 Global Leadership Monitor, only 1% of CHROs that we surveyed agreed that their career goal was to become a CEO.

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Source: RRA Proprietary Analysis, S&P100 Leadership Teams, 2022 (n=100 companies, 1583 executives); Bureau of Labor Statistics, 2021 “Employed persons by detailed industry, sex, race, and Hispanic or Latino Ethnicity”, https://www.bls.gov/cps/cpsaat18.htm

 

Key Finding 3: Conspicuous in their absence

Although gender representation within the broader executive population of the S&P100 leadership teams is important, it varies considerably across companies. With this in mind, we shifted our analysis to each individual leadership team and only included those companies with a stated leadership team of seven or more executives (95 companies in total).

Two of the companies have leadership teams comprised of all men; a further seven companies have only one executive who is a woman. There are only four teams with 50% or more women executive team, although none of those teams can be described as having a supermajority representation (2/3rds) of women executives.

At present, only five companies (with seven or more executives on leadership team) are at gender parity with the workforce benchmark. We wanted to understand how far off the remaining companies are from the workforce benchmark, and what meeting it would mean in practical terms. To do this we looked at the impact of the next available vacancy in a leadership role being filled by a woman — in this scenario, an additional 8 companies would reach parity with the workforce benchmark. If the next two vacancies were filled with women, an additional 15 companies would reach parity; adding three women executives, an additional 22 companies would reach parity; and in adding four women executives, another additional 15 companies would reach parity with the workforce benchmark.

It’s important to note that in this analysis we held the size of the leadership team constant (i.e. each vacancy would be a replacement hire, rather than an additional role on the leadership team).  Expanding the number of seats at the table is a viable strategy for improving gender diversity too, however, it is important that roles that get added to the team are giving the relevant resources and positional power to be influential within the leadership team and on a level-pegging with other more established roles.

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Source: RRA Proprietary Analysis, S&P100 Leadership Teams, 2022 (n=95 companies, 1561 executives);

 

Conclusion

Despite the positive business impacts of gender diversity in the C-suite, gender diversity on executive teams remains poor. Although parity with the US workforce benchmark does exist within two C-suite roles (CMO and CHRO), it is within roles that have not traditionally served as a path into the CEO position. Our data show that just 1% of individuals in the CHRO specifically aspire to be CEO, which speaks to the motivation gaps in what women and men seek in their careers.

The current limitations on the path to the top highlights the opportunities for an expanded consideration set for executives brought forth to become CEO, especially as women executives are significantly underrepresented in traditional feeder roles to the CEO. Furthermore, gender diversity in executive leadership means more than just equal representation of men and women in top leadership positions. Organizations must also ensure that once women are brought into executive leadership roles, they gain a sense of belonging and see the direct impacts of their contributions to the organization’s success.

 

More on this topic

What’s Motivating Your Women Leaders?

We explore the motivations toward women staying (or leaving) executive positions and what companies can do to get more women into leadership and retain those already in place.

Find out more

 


 

Authors

Gabrielle Lieberman and Tom Handcock of RRA’s Center for Leadership Insight conducted the analysis and authored this report.

Learn more about the authors and The Center for Leadership Insight

 

Additional reading 

 

Methodology

Defining leadership teams

We analyzed 100 of the largest companies in the S&P500 (what we refer to as the “S&P100”). This includes 1,583 executives on the leadership team at these companies, which is defined using Boardex (a people intelligence data provider) and each company’s own website.

Identifying gender

Gender data comes directly from Boardex. Due to the sensitivity and complexity of this data, no data is reported on individuals and all data is analyzed and reported in the aggregate.

Mapping job/role types

Our data sources (Boardex and company websites) provide information on each executive's job title and responsibilities. However, there is a high degree of variability in that information, which is both a facet of differences in specific job titles for common functional roles and differences in organizational structures and between industries.

We designed a role categorization process whereby each executive was tagged to a specific role. In some instances, only one executive in each company could be tagged to the role, while in other instances multiple individuals could be tagged to the same role category. See the below table for more details.

Roles Details

CEO

Multiple allowed to account for co-CEOs

CFO, CHRO, CMO, COO, GC, COO

Only one person per company listed (if role exists).

CIO/CTO

Multiple allowed in specific cases where there is a clear separation between Corporate IT (CIO) and Technology roles.

Strategy

Multiple allowed. Category includes Corporate Development. R&D and Innovation roles categorized in Product/Engineering (see below)

Commercial

Multiple allowed. Category includes merchandizing, and Customer roles (unless they have a very clear product/engineering orientation)

Other Functional Leadership

Any functional roles not caught in the above buckets. These are often sub-function roles (e.g. Treasury which is part of Finance) or roles that are just less common at this level e.g. Comms, Corporate Affairs.

Operations/Supply Chain/Logistics

Multiple allowed. Category covers supply chain roles, logistics, and operations role in banks and retail organizations etc.

Product/Engineering/Science

This category covers any roles that clearly relate to the development/creation of the product itself. Quality roles belong here as do innovation and R&D roles. In healthcare Chief Medical Officer roles live here too.

P&L Leaders

Individuals that run business units, regions or lines of business.

 


 

External References

1 Research: Adding Women to the C-Suite Changes How Companies Think, Harvard Business Review, 2021 Research: Adding Women to the C-Suite Changes How Companies Think (hbr.org)

2 SB 826 - California Senate (20212022) - Open States