For decades we have known that there’s a significant and deeply-entrenched gender gap in the workplace—that women are paid less than men for doing the same work (minority women even less), that there are extremely few women in top executive positions and that women are a scarce presence when it comes to membership on public corporate boards, that the US offers no mandatory paid maternity leave (which offers added pressure for women when they return to work), and so on. What’s particularly frustrating is that while we have been talking about gender inequity in the workplace for many years now, progress has been slow, and much work remains to be done. In some ways we are even moving backwards—the number of female CEOs dropped 25% this year.
While this can be viewed as a glass-half-empty situation, I optimistically consider it to be a tremendous opportunity to bring about real change. With a commitment from corporate leaders and a comprehensive strategy, I am convinced that all of us can work together to shrink the gender gap in this country and, with hard work and constant vigilance, one day to cause it to vanish altogether. That it not to say that once we achieve gender equity, we will not have to work relentlessly to keep it there.
In this post:
- The Gender Gap Status Quo
- Why Aren't There More Women In Leadership?
- How to Advance Women in the Workplace
- Empowering Individuals
- Why MBA Programs are a good place to start
The Gender Gap Status Quo
The data show that the gender gap is a very real problem in American business today. Here’s a snapshot:
- Catalyst, which tracks current statistics for women in the workplace, reports that there are currently only 23 women CEOs leading S&P 500 companies, or just 4.6 percent of the total (soon 22, Indra Nooyi leaving PepsiCo).
- Men hold the remaining 477 CEO positions in S&P 500 companies. Women hold only 26.5 percent of executive/senior level management positions in the S&P 500 and 36.9 percent of first/mid-level management positions.
- According to the Deloitte Missing Pieces Report, Caucasian women hold 18.3 percent of Fortune 100 board seats, while women from under-represented minority groups, who made up 35.5 percent of the U.S. female population in the 2015 census, hold just 4.6 percent of Fortune 100 board seats.
There is still a long way to go before corporate America can truly say that it has leveraged the tremendous power of women, but it needs to be stated that businesses haven’t exactly been sitting still over the past couple of decades. American companies have collectively invested more than $300 million and launched dozens of initiatives and strategies with the goal of promoting “women’s empowerment” and gender equality. And, without a doubt, the pay gap between men and women shrank considerably between 1979 (when women made 62.4 percent of what men made) and 2015 (when women made 82.7 percent of what men made). However, the Economic Policy Institute data also shows that this trend has flattened out, with no significant change over the past several years.
What has become clear is that women’s empowerment can spur positive global development and economic growth, and this is a dangerous missed opportunity for companies that don’t have more women in positions of leadership. The evidence shows that investing in women within the company and beyond is simply good business:
- Companies with more female board directors outperformed those with fewer in return on sales and return on invested capital (generating an excess compound return per year of 3.5% for investors over the previous decade), as well as improved environmental and social performance.
- Companies with more than 15 percent of women in top management carry, on average, a 19% higher return on equity than those companies where women represent less than 10 percent of the top management.
- High-gender-diversity companies have delivered slightly better returns, with lower volatility, compared with their low-diversity peers.
Why Aren’t There More Women in Leadership?
Given these positive results, why aren’t there more women in positions in leadership? Over the years, I’ve heard all sorts of reasons, many tied to long-standing myths about women in business. We’ve all heard common myths or false stereotypes such as women are more emotional than men, that women with young children are unwilling to dedicate themselves fully to their jobs, or that women have difficulty making tough decisions. These are just a few—there are many more—and it’s shocking to me that these tropes are viewed as the main obstacles to women in today’s workplace, and are seen as the fault of women.
Despite their inaccuracy, I do suspect that myths such as these have a very real effect on some decision makers who are recruiting for managers or executives, or for leaders who have to decide who to promote into positions of greater responsibility and authority. However, if you look beyond the myths, there are some very real factors driving the gender gap in business today.
As Jamie Breen, Assistant Dean, MBA Programs for Working Professionals at the Haas School points out, the number of women in the pipeline is lower than what she and other professionals in the field expected. Says Jamie, “Years ago, we thought that if the top of the pipeline was 50/50 men and women, that if you waited some number of years, organizations—all the way up and down—would just naturally be 50/50 men and women. That didn't happen. There are systemic things that have gotten in the way of women in leadership positions that none of us ever expected would be there.”
So, why then are there fewer women in the top ranks of businesses today? Although women enter the business world at the same rate as men, their numbers are noticeably reduced at two key points in their rise up through the ranks.
The first drop-off is when women approach their childbearing years. Women in this country are still expected to take on the majority of the duties related to rearing children—not just from the moment of the birth of these children, but for years after. While there are certainly men who pitch in to help, many women are so busy with their children that they do find it necessary to step back from their careers for a period of time, at least until the children enroll in elementary school. And, be reminded: the U.S. is one of the few developed countries who do not require companies to offer mandatory paid maternity leave. As these women step off the corporate ladder, they may be months or even years behind their peers when they later try to step back onto it, and it is estimated that they cannot easily regain the salary drop they experience.
The second drop-off is just before the C-suite. As women rise up in the leadership ranks, there are progressively fewer of them involved. While it’s not entirely clear why this is the case, I personally believe many women are worn out by the time they get to the C-suite floor, they’re tired of fighting the system, tired of waiting for the culture to change, tired of being one of just a few women at the top. It’s lonely. In addition, we don’t see ourselves at the top, and so we aren’t making headway. The adage is: You can’t be what you can’t see. This is not an indication that women don't have aspirations to get to the top, but it is possible that over time, those aspirations diminish.
And the statistics are inexcusably worse for women of color. There are currently no African-American women CEOs in the S&P 500 and just two women of color: Indra Nooyi at PepsiCo (who is stepping down) and Geisha Williams at PG&E Corporation.
My colleague Professor Laura Kray has been studying the barriers for women advancing in organizations and how people think about the explanations for these barriers. According to Professor Kray, “The fact that there remain barriers for women advancing in organizations is obvious based on the data. The challenge is to understand what exactly those barriers are. People have historically focused on human capital differences between men and women—that women don’t have as much experience as men, or they’re not as educated, or they don’t have the skills required to get to the top.”
Professor Kray has been studying how people explain the pay gap and women's stalled advancement within organizational hierarchies, and she has found that men endorse these individualistic explanations more than women do. She adds, “This is not so surprising when you consider that, as social perceivers, our perspective is colored by both our own direct experiences and our self-interest. In other words, our membership in various groups, including our gender, influences what we prefer to be true about inequality. Members of high status groups, including men, tend to blame inequality on women’s shortcomings in the labor market rather than systematic barriers in terms of discrimination and bias, in part because this justifies their advantaged positions.
Clearly, for a variety of reasons, there are fewer women in leadership positions than men, and the numbers get progressively worse as you go up organizations. This brings us to the next question: What can be done to advance women in the workplace?
How to Advance Women in the Workplace
There is growing recognition that business has a central role to play in helping to advance women, particularly within their value chains. In my own research and work with companies, both in the US and abroad, I have found that making long-term and persistent change is not easy, but it can be done. Here are some suggestions..
First, companies must make a variety of structural and policy changes that remove the workplace barriers that both women and men face. This means offering such things as onsite or subsidized daycare, paternity and maternity leave, flexible schedules, and opportunities to work remotely. It also means ensuring that company policies and practices mandate gender equity and that women—and men—of all races and ethnicities are treated fairly.
Second, we need to change corporate culture to create environments that equally support women and men. It’s here where we are currently doing the least well and where deeply entrenched unconscious biases manifest, because culture is extremely hard to change in a deep or lasting way. One of the things the recent emergence of the #MeToo movement has shown us is that men behaving poorly is pervasive and persistent, and it must change.
Third, my colleague Professor Jennifer Chatman has found that making culture more transparent can make a difference. In a 2015 study, Jennifer found that the members of mixed-gender groups who talked about specific “political correctness” rules were more creative than people who were told to be polite or sensitive. In other words, where cultural norms were made explicit, Professor Chatman found that study participants “had noticeably more divergent, novel, and interesting ideas than any of the other groups.”
By taking these and other common sense actions, leaders can help remove the organizational obstacles that stand in the way of women in the workplace. But that is just part of the equation—the other part is what women can do for themselves.
For a variety of different reasons, women sometimes put up their own obstacles and barriers to advancing into higher management and executive positions. I have witnessed self-defeating behaviors and self-biases and beliefs having a much greater, and much more negative impact on women in the workplace than many of us realize. This makes it even more important to identify these behaviors and beliefs and to neutralize them. There is even evidence that women do not adequately and overtly support other women.
Emilie Arel—CEO of Fullbeauty Brands, and a Haas School alumna—says that one of the things that women who aspire to move up the organization need to get over is the perception that they have to know everything there is to know about a position to qualify for it. Says Emilie, “I think that a lot of times as women in particular we come into a situation—it could be my first time as CEO, or my first time as a vice president, or the first day of my MBA classes—thinking that to get a seat at the table, we have to know everything. That is just not the case. The more experiences you put yourself in, and more confidence you build around different groups of people, the more you realize you’re worth it and can—and should—ask for what you want.”
Ultimately, this boils down to confidence—having it, building it, nurturing it. When opportunities arrive on our doorstep, we need to take them and not shy away, thinking we are for some reason undeserving or unqualified.
Emilie concurs that it’s also important to support one another in the workplace noting that, “It sounds very cliché, but we have to pay it forward and help each other. I think it's part of my job to take every single recruiter call I get, even if I'm not looking for a job—which I'm not—but to say, ‘Here are five people who I know. You should call them.’ I also make a point to take every LinkedIn call I get, especially from women, to have a coffee with them or have a 15-minute phone call and see how I can connect them. It’s important that we're thoughtful in the way we build our leadership teams. My leadership team is all women and one man, and that was not on accident.”
Confidence does come from experience and knowledge, and MBA programs are a good place to get both, along with a rich network of connections—with other students, instructors, and alumni.
Why MBA Programs Are a Good Place to Start
Whether you are a woman or a man, an MBA is a valuable credential for being taken seriously in the business world—it’s a calling card that says you have the skills and knowledge necessary to excel in an executive role. It signals your expertise and your commitment, and it opens the door to new contacts and networks. For women, however, an MBA may be even more important. Says Jamie Breen, “The research and my own anecdotal evidence shows that women tend to have some amount of impostor syndrome when they first get to more senior positions—they lack confidence in their own credentials and expertise. An MBA gives them a body of knowledge and a set of experiences they can bring to the table that says, ‘You are not an impostor. You have as much or more right to be here and to make these decisions as anybody else.”
When it comes to addressing the gender inequities that remain prevalent today, some schools have a greater focus on this than do others. At Haas, we have a deep focus on diversity and inclusion in our leadership training, our curriculum, our classroom, and most importantly, our culture—it’s a hallmark of the school to speak up on these issues and to lead in actively working to dismantle the gender gap.
We also have a strong population of men who are allies in this effort—not just to women, but to diverse individuals in general. We’ve got world class research coming out in this space on the broad spectrum of inclusion around race, gender, socioeconomic status, LGBTQ. And we are, of course, very proud that Financial Times recently ranked the full-time Haas MBA program #2 among US schools and #3 in the world for women. In fact, three years after graduation, women with a Berkeley MBA reported that they earned 3 percent more than their male classmates, while enjoying the 2nd-highest salaries of MBA programs worldwide, with an average of almost $180,000 three years after graduation.
Says Jamie Breen, “We really think about what kinds of leaders we want to put out in the world, both women and men. In particular, one of the things that we aspire to here at Berkeley is to have leaders that are both collaborative and that can be decisive when needed. Having women in the program makes us think more closely about what that looks like, what we mean by that, and how it actually plays out. Women tend to have a reputation for being more collaborative, but women can also be extremely pragmatic, and drive to a decision when they need to. A more diverse class makes for a different way of mixing those elements together, making the experience, we think, richer for everyone.”
I am extremely excited to play a role in leading our Center for Equity, Gender and Leadership to educate equity fluent leaders who ignite and accelerate change. Women and men do bring different experiences, lenses, and behaviors with them to the workplace. Together we can make our companies more successful, and more importantly, all feel that we belong and are valued. Everyone wants to feel that. And by doing so, we create a whole that is far greater than the sum of its parts.