womenomics 101 survey
DESCRIPTION
New Core Metric of Competitiveness: Gender Balance on Executive CommitteesTRANSCRIPT
It’s time to move beyond the current focus on boards. A more revelatoryindicator is the Executive Committee.
After great progress on drawing attention to the dearth of gender balance onboards, this survey invites you to look deeper into companies, and use metricsthat distinguish those serious about gender balance from the rest.
That’s what WOMENOMICS101 proposes to do. Everyyear, we will focus on asingle measure ofprogress: the genderbalance on the ExecutiveCommittee of the top 101companies in three keyregions of the globe.
THE CORE METRIC
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Executive Committee
= line = staff
46
US Leads: The US is ahead in thissurvey, with 89% of companies havingat least one women on their ExecutiveCommittee. A key warning signal,however, is that the vast majority ofthese Executive Committee membersare in staff or support positions (104out of a total of 137) - typically HR,Communications or Legal - rather thanoperational roles.
Europe and Asia Lag: Both Europe andAsia have barely embarked on thegender journey. 82% of companies inAsia and 68% of companies in Europehave no women at all on their ExecutiveCommittees. Both regions are inchingtowards tokenism, with 21% ofcompanies in Europe and 17% ofcompanies in Asia having a singlewoman at this level, usually in a staff role.
Women Promote Women: Only 12 companies out of 303 achieved a criticalmass percentage of 30% women on their Executive Committees, whichstudies have shown is significant if companies want to create more effectiveleadership teams. They are all US-based and three of them are run bywomen CEOs – Archer Daniels Midland, Kraft Foods, and WellPoint.
KEY FINDINGS% of US Companies with 1+ Women in EC Roles
No women on EC (11%)
1+ Women on EC (89%)
% of European and Asian Countrieswith 1+ Women in EC Roles
No women on EC 68%
1+ women onEC 32%
No women on EC(82%)
1+ women on EC 18%
WHY FOCUS ON EXECUTIVE COMMITTEES?
The focuson theboardroomhas beenhelpful inraising thevisibility ofthe genderissue. Itwas aneasy-to-understandand easy-
to-measure reading of genderbalance (or the lack thereof) inbusiness. Yet it is not the bestindicator of how gender balanced acompany actually is in 2009. Nor ofhow gender balanced they willmanage to become tomorrow. Ascompanies have discovered, it ismuch easier to appoint a woman ortwo onto a corporate board than it isto actually groom a woman for powerand have her progress through thetraditional, internal route to theExecutive Committee. Boards areoversight bodies. They do notactually run companies. So gettingmore gender balance at board leveldoes not necessarily have a verydirect impact on the gender balanceof the organization as a whole.
It is time to recognize that we needto go a little deeper into the genderissue in leadership.
WOMENOMICS 101 SurveyNew Core Metric of Competitiveness: Gender Balance on Executive Committees
FIRST ANNUAL ISSUE October 2009
Avivah
Wittenberg-Cox
US
Europe
Asia
WOMENOMICS 101 Survey
THE NAMES AND THE NUMBERS
The data for this survey is based onpublicly available information providedby the top Fortune 101 companies ineach region (United States, Europe,and Asia) on their websites. Whennecessary we confirmed details bytelephone or e-mail.
WHY CARE?A growing number of studies, fromMcKinsey, Catalyst and a range ofuniversities, show the correlationbetween gender balance in leadershipand improved corporate performance.Most companies now accept thatimprovement is necessary. Thecomplementary skills and styles ofmen and women have a positiveimpact on business. Not surprisingwhen most of the educated talent inthe world, and a majority of theconsumer market, is female.
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GENDER UNDER COVERMany companies are making itincreasingly difficult to identify who ison their Executive Committees.Various techniques have becomecommon, on corporate websites andin annual reports, to camouflage thegender of corporate leaders. Theseinclude removing all photos, reducingfirst names to an initial, or addinglarge numbers of people to somethingcalled ‘the Leadership Team’ which insome companies numbers up to 60people.
SURVEY METHODOLOGY
UNITEDSTATES
BEST WORST
EUROPE
ASIA
BEST TOKENWe sought further information from thecompanies that listed senior leadershipcommittees with more than 15 members(which we selected as a reasonable cut-off), and excluded those who chose notto respond to our request for moreprecision. 76 companies out of the total303 were excluded because we couldnot verify who was on the real ExecutiveCommittee. All percentages referred toin this document are based on thenumber of companies retained (227 outof 303).
• Bank of America• Hewlett-Packard• Cardinal Health• Target• Johnson and Johnson• MetLife• Archer Daniels Midland
• Sunoco• PepsiCo• Ingram Micro• Johnson Controls• Honeywell International• Prudential Financial• New York Life Insurance• News Corp• TIAA-CREF• Hartford Financial Services
• Walgreens
of companieshave no women ontheir ExecutiveCommittees.
We defined the Executive Committeeas the executives who report directlyto the CEO.
This is the first survey of this kind and we hope that in the future companies will be more forthcoming about thepeople who serve on their ExecutiveCommittees.
NEXT BEST
BEST NEXT BEST WORST
• State Grid (China)• Sony• Petronas • Industrial and Commercial Bank of China
• China Mobile Communications
• China Construction Bank
• Bank of China• China Southern Power Grid
• Baosteel Group• Hutchison Whampoa • Flextronics International• Bridgestone
WORST
68%
of companieshave no women ontheir ExecutiveCommittees.
82%
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WOMENOMICS 101 Survey
UNITEDSTATES
EUROPE
ASIA
HOW MANY WOMEN ON THE EXECUTIVE COMMITTEE?
LINE vs STAFF
LINE vs STAFF
104 STAFF33 LINE
27 STAFF12 LINE
9 STAFF4 LINE2 UNIDENTIFIED
8 17 21 18 6
58 18 7 1 1
59 12 0 1 0
A number of companies were excluded from the above figures because the information was unavailable - see Gender Under Cover
LINE vs STAFF
Companies
Companies
Companies
Number ofwomen
Number ofwomen
Number ofwomen
SUSTAINABLE BALANCE: LINE vs STAFFOne of the key criteria we explore in the survey is whetherwomen on Executive Committees are in line or staff roles.By line roles, we mean someone with profit-and-lossresponsibility.
Why this emphasis? Companies that only manage topromote women into leadership through staff rolesdemonstrate that they have not yet worked out how togender balance their leadership development systems andtheir talent pipelines. We would assume this also hasconsequences on their ability to understand the genderopportunities in their markets and among theircustomers. This does not bode well for the futuresustainability of the gender balance in theseorganizations.
While American companies have progressed further than others, we are not convinced their approach is entirelysustainable. As our report shows, only 24% of the senior executive women in the US are in line roles. This limits anysignificant amplification of the current modest balance. Companies in the US, therefore, still have much to do.
And as Europe and Asia are only just setting out on the gender journey, we hope that some of the lessons of the leadersof WOMENOMICS 101 will help them leapfrog approaches that have not convincingly proven their efficacy, and innovatefaster into more balanced, progressive 21st century leadership.
The Challenge Ahead
Stop Focusing on WomenToo often leaders, who mean well, wonder why women are not making it to the top, and try to find ways to ‘help’ them –with training, networks, mentoring or coaching. With women now representing the majority of university graduates in mostdeveloped countries around the globe, we’d suggest that it is time to stop asking what’s wrong with women, and startasking what is wrong with the culture, processes and mindsets of your organization if it can’t effectively attract, retain and promote a majority of today (and tomorrow’s) talent.
So we’ll help. By monitoring progress (or lack of it). Every year in our WOMENOMICS 101 survey. When your kids go backto school, we’ll go back to basics.
We’ll be Watching.
BEST OF THE BEST: ‘CRITICAL MASS’ COMPANIESStudies have shown that companies need to achieve acertain proportion of women on their leadership teamsbefore the competitive advantage of balance comes intoeffect.
Getting beyond tokenism: It has been shown thatorganisations need to have at least 30% women on theirtop teams, after which the impact is felt, driving betterdecision-making and leadership capability. Only 12companies out of the 303 in our list have achieved thiscritical mass position in their Executive Committees, all ofwhich are US-based. Three of them are run by women –Archer Daniels Midland (at 43%, the highest percentage ofwomen in the list along with Hartford Financial Services),Kraft Foods, and WellPoint.
Start Measuring BalanceCompanies that aim for sustainable, global performance need to become more gender balanced. That requires askingthe right questions of the right people. And holding them accountable for results.
CONTACTSINFO: [email protected]
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