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ESSEC – April 2, 2019
Women currently represent 36% of European MBA students and 42% of US MBA students.
However, when they enter the business world, they’ll notice just 22% of board members, and 7% of board presidents, are female.
Are business schools doing enough to push and prioritise gender diversity? For some, the answer is ‘not yet’.
Breaking down enrollment barriers
Without a steady stream of qualified female MBA students, the landscape of senior management is unlikely to change. Some international business schools are working hard to attract more female applicants each academic year.
Barriers begin to form before women even reach enrollment. 29% of women turn down MBA offers because of “financial concerns”, whereas the main reason male applicants rejected offers was because they chose an alternative university. In response, top business schools in China, Singapore, and Europe have launched MBA scholarships exclusively for women, ranging from €8,000 to full tuition costs.
The University of Pennsylvania’s Wharton School pairs prospective female students with current female students, funds outreach programmes, and even “hand-write congratulatory postcards to successful female applicants” to invite them to their MBA programme. 44% of Wharton students are female, making them one of the most diverse MBAs in global rankings.
Building the right campus environment
London Business School has cited increasing the number of female applicants as one of its main diversity goals. Currently, 39% of LBS MBA students are women, but 52% of the school’s senior management are women, so their initiatives are informed by first-hand experiences.
LBS regularly hosts female speakers, and its Women in Business Club is one of the largest on campus. Many of their female alumni have gone on to become CEOs, company presidents, and found their own startups.
The power of donors, awards, and mentorship
As educators and enablers, MBA programmes and universities need to focus on improving gender diversity beyond their programmes and within businesses.
One university taking this particularly seriously is international business school INSEAD. Ninety-eight percent of INSEAD alumni have mentored other women – including 89% of male graduates. 69% enable other female leaders within their own organisations, and 91% are heavily invested in increasing the representation of women in business leadership generally.
INSEAD graduate Helen Pitcher OBE is now the Chairperson of Advancing Boardroom Excellence, and committed to mentoring other women in business. “I have been supported and challenged by mentors – both female and male – at key points in my career, and it’s important for me to pass this on.”
A highly regarded study published in the Academy of Management Journal found “career development for women is tied more to attachment and relationships”. Whether this is true for everyone or not, building connections is essential when it comes to reaching senior leadership positions.
71% of Fortune 500 companies in the US have mentoring programmes, but networking groups with women from different sectors can sometimes be more valuable. Having access to a group of other professional women can create new employment opportunities, help women negotiate pay increases, and trade skills when they create their own businesses and brands.
For company founder and CFO Sophie Eisenmann, who finished her MBA in 2009, “Studying, working and sharing my life with so many amazing and inspiring fellow students helped trigger my decision to become an entrepreneur. INSEAD gave me a network and credentials that opened up doors.”
Driving the gender diversity agenda through education
Some business schools nurture their environment, some prioritise diverse admissions strategies, and others develop valuable scholarships and awards. The most successful focus on all three.
Back in 2017, the European commission pushed for company boards with more than 60% male members to prioritise recruiting more women. If MBA programmes and universities are determined to produce even more savvy, skilled, and determined female graduates, parity surely can’t be far away.
Why aren’t there more women executives on boards?
Gender diversity at board level means more profit. So why are we not at 50% yet?
Fortune-500 companies with the highest number of board-level women can enjoy ‘42% greater return on sales’ and ‘53% higher return on equity.’ Firms with just one woman on their board are 20% less likely to go bankrupt, while British, American and Indian companies with male-only directors ‘missed out on £430 billion in investment returns’ in 2014.
The benefits are clear, and the studies have been undertaken again and again, but the number of women at board-level, in C-level roles and in corner offices, remains worryingly low across the world.
In the US, women hold just under 20% of board seats, and 24.6% of those companies have just one woman director. Norway (46.7%), France (34.0%), and Sweden (33.6%) have the highest proportion of female board members in their biggest corporations, but it’s rare they achieve parity. In Europe as a whole, women hold just a quarter of board seats in publicly listed companies. 29% of 2017’s new board members in the UK are women, which is actually down compared with 2014 and 2012’s results.
Obstacles come from the top
To work out why entry to board level is such a different experience for women, businesses need to pinpoint where progress stalls. McKinsey’s survey of 222 US companies and 12 million employees found that fewer women are hired at entry-level positions, and their representation continues to decline as you search up the hierarchy. And don’t think that employers have fewer candidate choices; women actually hold 57% of university degrees in the US.
Examine ethnic diversity and the picture gets much worse. While one in five C-level roles are filled by white women, just one in 30 is filled by a woman of colour. McKinsey’s study highlighted that black women are less likely to interact with senior leadership and they’re the group least likely to be promoted within a company.
The survey also found that women have the same intentions as their male counterparts and the same level of ambition. If women joining a company ‘were promoted at the same rate as their male peers, the number of women at the senior vice president…level would be more than double’. Perceptions of women’s abilities, a workplace controlled by senior men, and fewer female decision-makers to advocate for them, makes the climb to the top harder.
Women Executive Search: Diversity and competitive advantages
Women make the majority of buying decisions throughout the world. In the US, their purchasing power is worth $5-$15 trillion annually, and they control 51% of personal wealth. Breadwinner status, educational level, and labor participation are all up, but women are underrepresented in the decision-making roles that directly influence the products and services they buy.
A room of people who fit one specific demographic can’t universally cater to people from different backgrounds with different needs. A diverse board of decision-makers is more equipped to move quickly through the market and outsell their competitors, but many publicly listed companies still need to be reminded they have no female participation on their boards.
Handing leadership roles from one man to another
The McKinsey study found 50% of men think women are well represented in their workplace already, despite the stats not remotely supporting this. 15% of men think it’s going to be harder for them to be promoted as the landscape changes and women advance further.
The bare truth is that board members are more willing to open the doors to people who are just like them, and if the current crop of executives is predominantly white and male, women are unlikely to get many seats at the table unless the promotion process changes.
A survey by Women Corporate Directors and Harvard researchers found the main reason cited by male board members for not welcoming more women is ‘a lack of qualified female candidates’. Mentorship and networking created and controlled by women can change this inaccurate perception, and shine a brighter light on an untapped pool of female talent.
Women in senior roles have the power to recognize the achievements of women beneath them and make sure their fellow board members pay more attention. At director and senior management level, recruitment and promotion needs to focus on women’s achievements just as much as men’s, or male-dominated boards will continue to claim they have limited choice and the picture will remain the same.
When it comes to female representation in business and government, much of the world still needs to catch up.
The recent #TimesUp and #MeToo movements have begun to deliver change in certain industries around treatment and pay, but they’ve also highlighted how damaging perceptions and assumptions have been historically and continue to be.
“Women don’t want leadership roles”
In 2016, former Saatchi & Saatchi chairman Kevin Roberts said ‘their ambition is not a vertical ambition’ when asked about lower numbers of senior women in advertising. He didn’t deny the presence of talented women in the industry, but suggested that most women just don’t want to lead and hiring decisions should be made accordingly.
The Boston Consulting Group investigated this idea by asking 200,000 global employees about their ambition. Gender has no impact on people’s willingness to advance it found, but company culture does. Women enter the workforce with ‘the same – or higher – levels of ambition as men’ and having children doesn’t affect their desire for promotion. In companies where ‘both male and female employees feel that gender diversity at their organization is improving’, there’s no difference between male and female ambition.
“Women don’t have natural leadership skills”
A Harvard Business Publishing article from 2015 highlighted eight capabilities leaders need to be successful, including being able to manage complexity, think strategically, innovate, use their networks, and adapt. In reality, none of these abilities are innately masculine or feminine, but gender stereotypes are difficult to break down.
A study of 361 C-level executives found the majority believe leaders are made, or a combination of ‘made’ and ‘born’. The Center for Creative Leadership revealed 46% think experience makes the biggest difference to leadership ability, while 34% think it’s training, and 20% believe it’s down to natural traits.
A now-famous internal memo criticizing Google’s gender diversity policies stirred up a huge amount of debate in 2017. ‘Google’s ideological echo chamber’ is a 10-page article circulated by a male Google employee who claimed women are underrepresented in tech ‘because of inherent psychological differences’. The author believed women have a lower tolerance for stress, are too agreeable, and have “a stronger interest in people rather than things”, making them less suitable for a career in tech.
The female tech community was quick to dismantle this, including YouTube CEO Susan Wojcicki, who criticized the memo for ignoring the ‘implicit biases that haunt our industry’. She also highlighted the unfairness of Google’s female staff having to ‘face a very public discussion about their abilities’, something male staff rarely need to confront on such a scale.
“Women have to behave like men to achieve leadership roles”
The leadership traits held in highest regard are largely influenced by examples set by the current crop of global leaders and world’s richest people, such as Elon Musk, Jeff Bezos, and Bill Gates.
Leadership skills and traits are often perceived as masculine, when actually they’re just shared by some of the men currently at the top. If women were more visible in leadership, we might be more inclined to associate risk-taking, learning by failing, and wielding authority as inherently female, rather than naturally male characteristics.
These generalizations are at best lazy, and at worst motivated by an unwillingness to share power, ideas and experience. The Boston Consulting Group’s research into male and female ambition also found ‘creating a culture that enables more women to be ambitious does not put men at a disadvantage’, demonstrating there’s room for a variety of skills and perspectives.
“Current female leaders are the only people who can make a difference”
Only looking to female senior leaders to welcome other women (currently 20% of boards in the US and 29% of boards in the UK), is going to slow progress down. Their influence can be really important, but they’re already drastically outnumbered.
Ilene H. Lang, the former CEO of non-profit Catalyst, believes ‘high-potential women must be sponsored by C-suite executives, most of whom are men’. Mentorship and sponsorship need to be initiated by the most senior in an organization, whether they’re male or female, or those lower down the hierarchy will have to open all the doors themselves and are less likely to be recognized.
Facebook’s COO Sheryl Sandberg conducted research through her organization, Lean In, and found ‘the number of male managers who feel uncomfortable mentoring women has tripled’ – an unfortunate side effect of #MeToo. According to Sandberg, senior men stepping back could have a huge impact. She believes ‘if you’re not going to have dinners with women, then don’t have them with men’.
The burden of mentorship and opening doors is currently on the few senior women, while many male-dominated boards continue to operate in the same way they always have. The barriers are starting to come down, but changing these damaging patterns is the only way to dismantle them completely.