Gender diversity has increased slightly at the top of America’s largest companies. Two companies in the Fortune 1000, Reynolds American and American Water, just announced that women will be taking over as their CEOs.
Susan M. Cameron was selected as the CEO of Reynolds American, the second-largest American tobacco company, effective May 1 to replace Daniel M. Delen. She had previously served in that role between 2004 an 2011. She is also a member of the board.
A little over a week later, Susan N. Story took over as CEO of American Water Works Company Inc., the largest publicly traded American water utility, after the previous CEO Jeff Sterba retired. Story had served as the company’s chief financial officer.
The addition of these two women at the top of their companies brings the total number of Fortune 1000 companies with female chief executives to 48, a 0.2 percent increase from before. More broadly, just 3 percent of the new CEOs brought in at the country’s largest 2,500 public companies were women this year, which was a decrease from the year before.
The slow progress in adding top female executives is mirrored by equally slow progress in adding female executives generally. Women make up less than 15 percent of executive officer positions at Fortune 500 companies and that level hasn’t moved significantly in four years. More than a quarter have no women on their executive team.
And the women who do make it to the top still struggle. Rather than be given leadership positions, female executives are still more often than not relegated to support positions. They experience a pay gap compared to similar male executives. Female chief executives don’t get high marks from their employees. And they are more likely than male CEOs to be forced out of their jobs, rather than to leave under positive circumstances. Part of the problem may be that unlike Cameron and Story, most female CEOs are brought in from the outside, a move that is more likely to happen in bad times. Indeed, women are often put on the “glass cliff,” more likely to be added to the top ranks in bad times than in good ones.
The United States has passed few policies to help urge gender diversity along. The only requirement is that companies have to disclose information about how they consider diversity when selecting their boards, and diversity is so broadly defined that it doesn’t necessarily refer to gender or race. Still, most don’t even comply with that simply rule. Other countries have taken more aggressive steps. The United Kingdom has a target of getting the country’s boards to be 25 percent female by the end of 2015, and after it was set the share of women on boards hit a record high. Japan has also set an ambitious goal for increasing the number of female executives. Other countries, such as Belgium, France, Germany, Italy, and the Netherlands, have actual quotas, and in Norway, which instituted a 40 percent quota, women hold 35 percent of board positions.
Besides increasing diversity, the companies in these countries may also soon be reaping financial rewards. Many different studies have found that higher levels of gender diversity in leadership leads to better performance and higher returns.