Female leaders face built-in career blocks from the start

More women are working their way into corporate boardrooms, but new research shows the route to executive leadership roles has turned out harder to navigate.

“The thinking was, if you got more women on boards, you would see the trickle-down and get more women into executive positions. That didn’t happen,” says Tamara Box, a structured finance lawyer and a founding member of the 30% Club, a predominantly UK-focused campaign to boost the number of women in board seats and executive leadership positions.

“We have moved incredibly well in terms of boards, but it’s not moved in the same way in terms of top executive roles,” she adds.

While two-thirds of the UK’s FTSE 350 companies have hit a widely adopted target of 40 per cent female representation on boards, less than a fifth have achieved that for executive leadership roles, according to the government-backed annual FTSE Women Leaders Review. It tracks female representation on the boards of leading UK-listed and private companies.

Separate data from the US shows a similar divergence. There are more women on US company boards than ever before, but research from data provider ISS Corporate shows the number of female executives has fallen for the first time in decades.

Female business leaders, including Box, say there are many reasons why this split is emerging. However, the main point they make is that a woman aspiring to the highest echelons of a corporation finds the goal remains stubbornly hard to attain, and retain.

Voluntary efforts, such as the 30% Club’s, while helping to change the boardroom, have only turned their attention to executive positions more recently. And here the problem appears to originate further down the corporate structure.

For women to make it on to an executive committee requires a steady stream of female candidates into jobs that feed into those senior leadership positions. But a barrier can be found at the first step up to manager. For every 100 men promoted from entry level to manager, only 87 women make the same move, according to the 2023 Women in the Workplace annual report, focusing on the US and Canada, from consultancy McKinsey, in partnership with LeanIn.org.

Other barriers persist, recruiters say, both at home and at work. Many women do more unpaid work related to a household and take breaks in employment when they have children — just as they enter into lower and middle management. This time out can also slam the brakes on career progress and rule them out of senior job opportunities — either because of their own preference or because managers assume wrongly that they would not be interested.

Firms persistently underestimate the potential of their female employees

Bias in hiring and promotion occurs at all levels, too, often leading to inequalities in pay and to more men being evaluated and then promoted based on their potential. A 2022 academic study, using data on 29,809 management-track employees from a large North American retail chain, found that women received substantially lower potential ratings despite better job performance scores. “Firms persistently underestimate the potential of their female employees,” said the authors.

In addition, female candidates often rule themselves out because they believe they need more qualifications to be given a shot at a job. This is particularly the case for positions where men are stereotypically believed to have an advantage, such as more analytical or management-oriented roles, according to a 2023 research paper funded by the National Science Foundation and Harvard Business School.

Yet glimmers of improvement have emerged, such as the flexibility in working patterns brought in by the pandemic. The adjustment has been significant for everyone. But women with greater carer responsibilities, in particular, may find that freedom to move working hours around and greater acceptance of online meetings will help meet demands on their time.

For those women that do want to push ahead, mentors, sponsors and a robust network of support inside and outside a company are important.

I grew up in a really small US town, where there were no stop lights . . . I was never preordained to do something

Deanna Oppenheimer, now chair of hospitality multinational IHG, recalls how male leaders encouraged her to strive for bigger jobs and for board roles outside her employer when she was making her name in retail banking. They said “we need the best talent we can get”, Oppenheimer says. She served in a number of roles at Barclays, including as vice chair of global retail banking between 2005 and 2011.

“I grew up in a really small [US] town, where there were no stop lights,” she says. “I was fortunate that people saw something in me. I was never preordained to do something.”

Her experiences led her to found BoardReady, a not-for-profit organisation that works with senior leaders to increase corporate and board diversity. “You have to take a chance when you’re up and coming and give a chance [to others] when you get there,” she says.

What happens once women are appointed to the top jobs? It turns out that female executives tend to have more challenging briefs and are viewed as inherently risky. Women at the top are also quicker to be judged for failure and punished for mistakes.

Research published in April by headhunter firm Russell Reynolds shows that, not only are fewer women being appointed to chief executive globally, but their time in the role is much shorter than for their male counterparts. The research found that, in the past five years, almost a quarter (24.1 per cent) of women CEOs left their role within 24 months of appointment. That compares with 10 per cent of men. In the past year, for example, a string of female chief executives have left their companies.

Women taking on the top job often have “extra” roles added on, points out Vivienne Artz, head of the FTSE Women Leaders Review. These range from undertaking pro bono initiatives on diversity, because they feel it is important to act as a role model, to taking on prominent jobs on industry bodies and simply being publicly visible. “These are roles that are not compensated or valued,” says Artz. 

She believes it contributes to women exiting executive life earlier than they might otherwise for a more portfolio career — including a series of boards seats.

And yet, even then, ageism gets in the way: a Harvard Business Review article last year concluded there is “no right age” for professional women. 

“The expectations of a female executive are just different,” says Artz. “They are overextending themselves . . . at the expense of themselves.”