While more women hold CEO jobs than in past decades, progress in breaking the glass ceiling has stalled. Part of the reason may be that they aren’t lined up to snatch the top job because they’re stuck in the wrong kinds of roles.
A majority of the top ranking women who aren’t yet CEO working for companies in the Standard & Poor’s 500 index aren’t in the operational jobs that usually lead to chief executive, according to data from Bloomberg. Instead, 55 percent are in roles in human resources, legal departments, and finance departments. Just 42 percent were in operating jobs.
Another report found that two-thirds of the female executives at Fortune 100 companies are in support positions such as human resources, communications, or legal. And worse, just 16 percent of the people who report directly to the CEO are women.
This matters, as Bloomberg reports that about 94 percent of the CEOs of these companies were in top operational jobs before they reached the top level. Only 6 percent came from the kinds of jobs female executives tend to hold. These positions may also hold women back from getting board positions, as they are less likely to get picked from those ranks.
Women hold just 24 of the top roles the 500 companies on Standard & Poor’s index, and they still hold less than 15 percent of the CEO positions at Fortune 500 companies and less than 17 percent of board roles. Last year was the fourth year with no improvement for CEO positions and the eighth with no change in board positions.
The failure of these companies to groom women for the top roles isn’t just a matter of inequality, but a matter of bad business. Those with female CEOs see returns that beat the stock market and generate more revenue. We’re not the only country where that’s true: Vietnamese companies that have female CEOs tripled their gains over the last five years, nearly twice as much as a benchmark index. Diverse leadership generally leads to better results, as the companies with the best financial performance around the globe have more women among their top executives.
There are other headwinds against making progress in gender equality in the top roles. Women are more likely to be picked for leadership when times are bad, and once in they’re more likely to end up forced out than men. Women who make it to the top are also penalized for promoting other women, mitigating any potential ripple effects of diverse hires.