With the naming of Lynn Good as the new CEO of the utility Duke Energy last week, the number of women at the helm of a Fortune 500 company rose by 4 percent, now standing at a grand total of 22. The company will pay her a base salary of $1.2 million plus other incentives.
Women have made very slow progress in gaining entrance to the highest positions at large companies. Last year, they held just 14.3 percent of executive officer positions at Fortune 500 companies, and a quarter of the companies had no women serving in these roles at all. Their share of these jobs rose by a mere half a percentage point from the year before, and 2012 was the third year of such stagnation. Meanwhile, women hold just 8 percent of the top earning jobs in the country.
Women similarly hold few board seats at these companies. In 2012 they held just 16.6 percent, and ten percent of the companies had no women serving at all. Last year was the seventh consecutive in which there was no growth in those numbers.
Yet numerous studies have shown that more diversity at the top ranks of a company leads to better performance. One study of companies in the MSCI AC World index found that companies with a gender diverse board outperformed those with only men by 26 percent over six years. Another study of Israeli companies found that boards with at least three directors of both genders attending meetings had significantly larger returns on equity and net profit margins.
Increasing opportunities for women also boosts the economy. As much as 20 percent of the country’s growth in productivity over the past half century can be attributed to fallen barriers in the workforce for women and other groups who had previously been excluded.
Other countries have used quotas to get more women into top roles, including Norway, which currently has a requirement that 40 percent of board members must be women. After Norway instituted its policy, women hold 35 percent of non-executive board director positions and the number of women in senior management rose from 15 percent to 18 percent. In Sweden, which has a target of 50/50 balance, women hold a quarter of boardroom positions and 22 percent of senior management roles. And in Spain, which instituted a requirement of 40 percent women by 2015, women’s board membership increased from 7 percent to 13 percent and senior management has gone from 7 percent to 10 percent.