Where Are the Women?


  • Programs designed to promote women benefit all employees, both women and men
  • CEOs must add recruiter-in-chief and chief development officer titles to their CVs
  • Retention, not recruiting, is the main challenge to gender Balance at the top
  • Work-life balance initiatives don’t stand a chance against the up-and-out culture that defines success at most for-profit organizations

Businesses in the U.S. are doing a much better job of recruiting women, identifying high-performance individuals and grooming upcoming stars for senior leadership and
board positions. As institutional barriers to women’s development are systematically dismantled and organizations large and small invest in programs designed to make workplaces more accommodating, it is appropriate to ask why progress is so slow.

Yes, 2013 saw a new record for the number of women Fortune 500 CEOs, but that number—22—is hardly inspiring. Women hold approximately 14 percent of board seats, about the same proportion as a decade ago. Still, progress is visible. In 2008, CEOs chose Anne Mulcahy, then-CEO of Xerox, as the first woman to be named CEO of the Year. In July of 2009, Ursula Burns succeeded Mulcahy in the first woman-to-woman CEO-handoff of a Fortune 500 company. However, despite substantial gains at select organizations—think Virginia Rometty at IBM, Indra Nooyi at Pepsico, Marissa Mayer at Yahoo—mid-level women who cast their eyes upward still see mostly men looking down. The further up you go in the hierarchy, the fewer women you will see.

“The imperative of all this is that every CEO needs to add recruiter-in-chief, as well as chief development officer to [his or her] responsibilities—with a view toward adding gender diversity at every level of the enterprise,” says Maggie Wilderotter, chairman and CEO of Frontier Communications and the longest-tenured woman CEO of a Fortune 500 company. “A lot of women make decisions about broadband and telecommunications,” she notes. “If we want management teams that reflect the customer base we serve, it must start with the CEO.”

Wilderotter works hard to identify, recruit, develop and promote high performers. She has been known to recruit on airplanes, in hotel lobbies and at conferences. And when she identifies talent, her goal is to give that leader P&L responsibility as quickly as possible. The results speak for themselves. About half of Frontier’s 180 general managers are women. Of the CEO’s six direct reports, four are women. “It’s about bringing in great talent, promoting them into highly visible and important jobs with P&L responsibility and broadening responsibilities over time,” Wilderotter says.

The Business Case for Diversity

The facts are not in dispute. Organizations of all sizes with more women in executive roles and on boards of directors tend to outperform companies with less diversity. A 2011 study by McKinsey & Company showed that in four out of five industries, the businesses with the most women at the top earned a higher total return to shareholders than the companies with the lowest women’s representation. According to a 2012 Catalyst study, return on equity (ROE) was 35 percent higher for more diverse organizations. Of course, correlation does not necessarily equate with causation—and additional factors not identified by these studies may well be contributing to those performance figures. Still, businesses are increasingly recognizing the advantage of diversity in the upper echelons of executive offices.

Women hedge fund managers outperform their male counterparts, as demonstrated by the Rothstein Kass Women in Alternative Investments Hedge Index. In the third quarter of 2012, the women-led fund scored a net return of 8.95 percent compared to the 2.69 percent net return overall on the HFRX Global Hedge Fund Index. Rothstein Kass’s survey of over 350 senior women involved in the alternative investment industry (hedge fund, private equity and venture capital), suggested that women are more risk-adverse than men and therefore better positioned to skirt downturns and avoid market volatility.

In the last five years, corporations have been phenomenally successful at on-boarding women. Today, with more women than men graduating from universities, MBA programs and law schools, most organizations have excellent records at recruiting and hiring women. Even smaller companies are rolling out women’s leadership councils, sponsorship programs and formal and informal initiatives to develop women leaders.

However, along the way, something happens to frustrate the progress. About five to seven years into their careers, women start to leave. Sometimes high performers simply quit, but often they pull back, play it safe or actually edge themselves out of being considered for top assignments, usually in anticipation of starting families. This is the dynamic that Facebook COO Sheryl Sandberg asks women and the organizations that value them to challenge in her new book, Lean In: Women, Work, and the Will to Lead.

Why Women Leave

Women, Sandberg says, often undermine themselves. She recounts the negotiations she had with Mark Zuckerberg when the founder of Facebook offered her the COO spot. Sandberg was ready to accept Zuckerberg’s first offer until her husband coached her by saying that no male executive would ever do that.

Gender differences abound. If a job description calls for five requirements and a man meets one of the five, the man usually thinks he’s qualified. If a woman meets four of the five, she sometimes questions whether she has the proper experience. Virginia Rometty, the first woman CEO of IBM, describes how—early in her career—she almost backed off from a “big job” because she didn’t feel totally prepared, telling the recruiter she would have to think it over. Later, as she discussed the situation with her husband, Rometty was stunned when her husband pointed out, “Do you think a man would ever have answered that question that way?”

“Leaning in,” Sandberg suggests, is all about women challenging the gender differences that dilute their confidence and having faith in their ability to combine work and family. Of course, it can be hard for a woman to hold on to that confidence when she squints at the occupants of the C-suite and boardroom to see if she recognizes anyone who looks like her. Often, she can’t. “That’s a very discouraging, daily, silent message, and that reality will trump any nice-sounding noises about how the organization values the contributions of women,” says Elle Kaplan, CEO of Lexion Capital Management, a New York-based financial services firm. “Nothing motivates ambitious women more than having tangible examples of women at the higher reaches of the enterprise.”

It’s Not—Usually—About the Money

Accenture lost a valuable contributor when Michelle Wetzler, a highly respected five-year consultant, resigned—for much less money and security—to join Keen IO, a San Francisco-based startup. Wetzler, 28, was on a fast path at Accenture, almost certain to make managing partner or senior executive. However, despite Accenture’s entreaties for Wetzler to stay, the company lost its considerable investment in her development, direct billings and leadership.

Here’s the bad news for the CEO of every company who believes in the business benefits of gender diversity and inclusion: the loss of high-performance female leadership is usually not about money or job security. Those are things that CEOs can actually do something about. Accenture lost Wetzler because its well-intentioned ideals of employee empowerment and work-life balance efforts crumbled before the reality of manager demands for endless hours of travel, stress and overwork.

“Accenture says it values work-life balance,” Wetzler says, “but my experience is that company leaders prioritized other values.” She started to take a hard look at her career when she realized that most project leaders were under-reporting the hours of team members. The tipping point came when she realized that junior members of the team were modeling themselves on her own crazy hours. “I first started considering leaving when one of my direct reports actually asked my permission to eat dinner,” she recalls.

This discussion is not intended as a criticism of Accenture, a company which is certainly ahead of many others in encouraging the development of women leaders and creating a flexible work culture. Culture is determined by behavior; and as long as company leaders from the CEO down model an up-or-out model that says the surest route to success is overwork, then even the most well-funded employee empowerment initiatives will be futile. Keeping the pipeline filled with the most capable women leaders requires organizations to match ideals with reality.

To reverse this trend, CEOs need to do more than just ensure gender-equity at the career-entry stage. They have to challenge and ultimately replace the up-and-out culture of most for-profit organizations. The name of the game is retention. If CEOs fail to do this by holding managers accountable, many of their most valuable contributors—and not just women—will opt out.

Less Structure, More Culture

Empowering the next generation of women leaders is less about structure and more about culture. That’s the central message of The Committee of 200 (C200), a Chicago-based invitation-only membership organization of the world’s most successful women entrepreneurs and corporate leaders. C200’s more than 400 members generate over $200 billion in annual revenues and employ more than 2.5 million people.

CEOs who want to recruit superstar women to their boards face a lot of competition, says Russell S. Reynolds, Jr., chairman and CEO of RSR Partners, a search firm for based in Greenwich, Connecticut. He describes a client’s strategy in recruiting a particular high-profile woman to accept a board seat when she had nine other offers. “The CEO and chairman got a plane and went to visit her to personally express how much she was valued,” Reynolds says. “Women tend to be more relationship-driven than men, so the gesture proved hugely important. As far as I know, we were the only ones who made that gesture.”

Before she accepted the CEO role at a startup pre-fab construction business called Project Frog, Ann Hand took advantage of formal women’s leadership development programs at BP, McDonalds and ExxonMobil. With a team of 35 people at Project Frog, Hand knew that while she couldn’t duplicate those kinds of formal development programs, she was capable of creating the conditions for everyone to stay flexible and get exposure to new challenges. Hand admits that she sometimes forgets how key the fact that the CEO of Project Frog is a woman is to young women considering where to place their allegiance.

To truly move the bar on developing women leaders, CEOs must shift the conversation from the metaphor of diversity to the metaphor of a fully capable workforce delivering measurable business benefits, says Boston-based George Davis, co-leader of the global board practice at search firm Egon Zehnder International. “The single next most important thing is for CEOs to impose accountability, starting with themselves, for a robust hiring process that considers business needs in balance with employee needs.”

Frontier Communications CEO Maggie Wilderotter’s Tips for Women Leaders

  • Refuse to be invisible. Take high-profile assignments and make sure your contributions are recognized and acknowledged. There’s a balance between hubris and humility. Find it.
  • Absolutely, positively, gain field expertise. There is simply no substitute for P&L responsibility. It has to be a big part of your work experience if you eventually want to be in the C-Suite—because results matter.
  • Network. Every encounter is a chance to make a connection. Attend events that attract CEOs. Meet them, build relationships and follow up. Networking allows you to think about your career strategically and to assess where you have gaps.
  • Pursue a board seat. Get to know the nominating committees of the boards of companies that interest you.
  • Volunteer to speak. Gain a public profile. You know more than you think you know. Share it and cultivate a profile.
  • Write articles and/or be available for comments. Become known as a go-to person. Be an expert others can tap.

Likeability Penalty

There are a lot of structural barriers holding women back, such as inflexible workplaces, historical pay inequities and public policies that put the burden of child care mostly on mothers. Because these barriers are real and well-recognized, debate is ongoing about how best to address them. As that work continues, perhaps the key to making real progress is to recognize that women are held back not only by structural barriers but by unthinking stereotypes, double standards and antiquated assumptions about the leadership of men and women.

By the time they make it to the top rung, both male and female CEOs have to accept that every aspect of their lives will be scrutinized and every decision, large or small, will be second guessed. Just to survive, leaders of every substantial organization eventually develop both a thick skin and a certain indifference to whether they are liked or not. Yet, when it comes to judging men and women CEOs, a double standard applies.

Research shows that as male leaders become more powerful, they are better liked by both men and women. As women become more powerful, the opposite is true. Sheryl Sandberg, COO of Facebook, is focusing attention on this “likeability penalty” as an example of women being held back by forces that businesses—as a rule—are powerless to resolve. These forces operate within men and no less in women. Most of the nitpicking Sandberg describes in her book is by women criticizing other women. One of Sandberg’s primary goals in her controversial new book Lean In is to bring these forces more into public consciousness.

Yahoo’s CEO Marissa Mayer recently paid the likeability penalty. When it was reported that Mayer clamped down on telecommuting, she faced howls of criticism from observers who linked her decision to her own parenting choices, noting that Yahoo built a nursery next to the CEO’s office. Putting the merits of ordering some 200 at-home workers back to the office aside, it’s likely that had the CEO of Yahoo been named Morris Mayer, he would have escaped such personal criticism and might even have been appreciated for challenging the costs of telecommuting.

Part of this scrutiny, no doubt, is precisely because, in 2013, there are so few women CEOs. When half the corner offices and board seats are occupied by women, there will no longer be a need to play out The Mommy Wars: Boardroom Edition and all leaders will be evaluated on the same criteria. However, to make that goal a reality, organizations have to figure out how to make sure that high-performing women stick around. The record, so far, is not inspiring.

I asked Christine Jacobs, the longest-serving woman CEO of all U.S. companies listed on the New York Stock Exchange, what she would do if she were starting her career in 2013. The CEO of Buford, Georgia-based medical-device maker Theragenics said she would be attracted to a startup. “Rigid corporations are no places for any kind of talent to flourish,” she says. “To the extent they protect the status quo, they are not good places for young women—or young men for that matter—and do not represent the most exciting career opportunities.”

Jacobs marvels at the headwinds and tailwinds that buffet younger female workers. On the one hand, the women are boundlessly realistic about their careers. “They are inherently looking for good bosses,” she says “and will do anything to live up to expectations.” On the other hand, there are still too few women training in technical areas. “I’ve had exactly one female nuclear chemist come through here in 25 years,” she says.

Mentorship is Good, Sponsorship is Better

Mentorship supports personal development; sponsorship is laser-focused on professional development plus advancement. “A sponsor is someone who is actively advocating for your success and staking their personal capital on your development,” says Carole Watkins, chief human resources Officer of Dublin, Ohio-based Cardinal Health. “When there is [a] talent-planning meeting, it is a fortunate woman who has a sponsor sitting at the table who can say about a particular woman, ‘I’ve seen her work.
I believe she is a good fit for this role and let me give you three reasons why.’”

Enlightened CEOs are also in the best position to challenge certain micro-inequities. For example, male mentors sometimes undermine the mentorship process by fixating on not allowing female mentees to fail. “It’s important for all young managers to have the opportunity to fail and be mentored through that experience,” says Noreen Beaman, CEO of Brinker Capital, a $13 billion investment management firm. Unfortunately, given a choice between coaching a woman mentee to try something easy or taking a risk at which she might fail but grow, some male mentors will unconsciously encourage women mentees to go for the easy win instead of the riskier, but more rewarding course. “CEOs can challenge this dynamic by encouraging women leaders to be as bold as their male counterparts,” she says.

As women assume authority, organizations often become less hierarchical and new opportunities for learning emerge. Elle Kaplan recalls that when she was named VP of sales at Lexion Capital Management, she agreed to be mentored by a male sales director she subsequently hired. “My attitude was I should be able to reach out to the people who have the best experience to coach me, wherever [or not] they reside in the hierarchy,” she says. The coaching helped improve her game. Few men in her position would consider asking for mentorship from someone junior to them in authority.

John Kador :John Kador is a business author based in Lewisburg, PA. His last book is What Every Angel Investor Wants You to Know: An Insider Reveals How to Get Smart Funding for Your Million Dollar Business (with Brian Cohen, McGraw-Hill).