Women At The Top? Not So Much

Wendy Beecham is the Managing Director of Executive Education at UC Davis. She has over 25 years of leadership experience, and has coached c-level business leaders on executive performance.

Last month, the UC Davis Graduate School of Management published a report detailing statistics on women business leaders in California. The study, in its 8th year, details the presence of women at the very top of the 400 largest publicly held corporations headquartered in California. The findings paint a disappointing picture of female representation on the boards and in the executive suites of these high-profile companies.

Women still hold fewer than one in 10 of the highest-paid executive positions and board seats at top public firms in California—and over the past eight years there has been no measurable, significant progress in the representation of women in the top decision-making posts of these California 400. Put in perspective, the combined market capitalization of these publicly traded Golden State firms is almost three times the annual GDP of Mexico- we’re not talking chump change here.

Key Findings

  • There is only one woman for every nine men among directors and highest-paid executives
  • Only 13 of the 400 largest companies have a woman CEO
  • Almost half (44.8%) of California’s companies have no women directors; 34% have only one woman director
  • Of the best known companies in California—Apple, Google, Intel, Cisco, Visa, eBay, DIRECTV, Yahoo!, and PG&E—all had no women among their highest-paid executives at fiscal year-end
  • The 128 Silicon Valley companies, which represent $1.2 trillion, again showed the worst record for percentage of women executives. Only 6.6 percent of their highest-paid executives are women, and only 8.4 percent of Silicon Valley board members in our study are women

The Business Case for Diversity Overall

A recent McKinsey study found startlingly consistent correlations between diversity and performance: for companies ranking in the top quartile of executive-board diversity, return on equity was 53 percent higher on average, than they were for those in the bottom quartile. At the same time, margins on earnings before interest and taxes at the most diverse companies were 14 percent higher, on average, than those of the least diverse companies.

Companies with more diverse executive teams outperform their peers: fielding a team of top executives with varied cultural backgrounds and life experiences can broaden a company’s strategic perspective. And relentless competition for the best people should reward organizations that cast their nets beyond traditional talent pools for leadership.

Research from Catalyst and others reflects that companies with a strong female representation at top management level perform better than those without. Gender-diverse boards have a positive impact on performance including a 35% higher return on equity, and stronger stock market growth.

Charting the conversation

Women make 85% of household purchasing decisions, hold 51% of the nation’s private wealth, and hold 51.5% of all management and professional positions. These figures demonstrate that women are definitely decision makers and key influencers at home and in the office—why not in executive boardrooms, too?

Last week, Watermark and 2020 Women on Boards hosted an event revealing the statistics from the UC Davis study. Author of the study, Amanda Kimball, started the evening off with an anecdote. She explained that the women in her mother’s generation fought hard for the opportunity to enter any career field they wanted. She, and thousands of other women like her, was raised to believe they could grow up to be anything they wanted to be. In 2012, it appears that the job title “corporate executive” isn’t well represented on that list of professions open to women.

How Can We Drive Change?

Start off by creating a dialogue with your executive peers about why this conversation is important.  It’s not just about women—it’s about the need for greater diversity of ALL kinds, and women just happen to be part of that equation.  The conversation needs to transcend being an HR initiative about diversity or about flexible working hours.  These are challenges that need to be addressed by all leaders at the top who can role model the changes they hope to see.

Broaden the pool of people you associate with in your network and in your talent selection.  You have a greater chance of hiring a more diverse team or appointing a more diverse board if your pool of talent is broader than just “people like us”.

Women can also do a better job of supporting one another by providing recommendations of other qualified women they know who are available for executive level and board positions. Men tend to do a much better job of networking, asking to be recommended, and putting forward names of people they think are qualified.

Women tend to feel a personal responsibility to learn as much as possible about the person they are going to recommend, in case the person being recommended is not a fit or somehow embarrasses them. And of course, another proven fact is that opportunities arise for women and other diverse groups if they have a sponsor in a senior role helping create opportunities for them. These people have a seat at the table and can slide in a new chair for you.

Considering the glacial pace of movement, it’s time for a widespread conversation about increasing diversity at the top levels of our nation’s organizations. What are your ideas to take action and help move diversity forward?

Wendy Beecham is the Managing Director of Executive Education at UC Davis. She has over 25 years of leadership experience, and has coached c-level business leaders on executive performance.

To learn more about executive education programs at the UC Davis Graduate School of Management contact Wendy Beecham today.