Developing Senior LeadersExcerpted from a Fortune Knowledge Group & RBC collaboration. Reprinted with permission. Visit here to read the complete whitepaper.
March 14, 2017 — Women make up a majority of college graduates and Fortune 500 entry-level employees. Yet they are seriously underrepresented in senior leadership positions.
In fact, the proportion of women declines at each stage of executive career paths. To gain insights into the strategies that enterprises are pursuing to improve gender diversity among senior leaders, in September 2016 FORTUNE Knowledge Group, with sponsorship from RBC, launched a survey of senior executives (VP and above) from around the world. These are the top three findings based on the first 500 responses. The results point to a number of broad trends but are subject to revision.
Most companies have explicit female talent strategies, but a surprising proportion fail to translate them into practical actions
About two-thirds of executives say their organization pursues an explicit women’s talent strategy and offers high-potential female candidates special opportunities for mentoring and sponsorship. Large proportions also say that they make efforts to build an employer brand that emphasizes an inclusive, high-performance culture. And most agree that their corporate culture encourages diversity, that discrimination is not tolerated and that they offer employee training to fight biases.
Surprisingly, however, only a minority of executives indicate that their company has translated these policies into practical actions. Fewer than half say their firms employ transparent, gender-neutral hiring criteria, have transparent processes for identifying high-potential candidates, offer parental leave beyond legal minimums, or track gender diversity at key career milestones.
Women face major challenges at nearly every stage of their career paths
There is widespread recognition of the scope and magnitude of the obstacles women face at each stage of their careers. Nearly four in five respondents say that female applicants face “somewhat significant” or “very significant” obstacles even during the pre-recruitment and recruitment stages. Moreover, female respondents are more likely than their male counterparts to say that women face “very significant” challenges at every subsequent stage of their careers.
For example, about half of female executives – compared to only one-third of men – believe that women face major obstacles progressing to the C-suite. Opinions are varied concerning the internal challenges to increasing the number of female leaders in the organization. About one in three female respondents say that a lack of leadership from the top is the biggest obstacle, but this is shared by only about one in five male respondents, who are more inclined to point to cultural issues. When it comes to external obstacles, increasing family responsibilities tops the list overall, although men are somewhat more likely to cite lack of career-oriented female candidates.
Companies that fail to develop female leaders pay a price in terms of performance
To assess the connection between female leadership and performance, executives were asked to rate their own firm’s performance relative to its principal competitors in terms of profitability and revenue growth. “Leaders” were defined as the top 20% in terms of these indicators. Leaders are more likely than other firms to recognize the need for more effective leadership development.
They more often have a high percentage of women in key leadership positions, and have established an explicit women’s talent strategy with strong support from the top and buy-in from all levels of the organization. And they have a zero-tolerance policy for all forms of gender discrimination. Leaders also point to customized leadership training and sponsorship as being two of the most promising possibilities to overcome obstacles to women’s advancement.
Read the entire whitepaper here.