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Women In The C-Suite, But In The Wrong Roles?

What's happening? A study by the Wall Street Journal has found one of the main reasons there are so few female CEOs is the lack of women with profit-and-loss (P&L) responsibilities in c-suite positions. The research, conducted with Equilar, found that while success in P&L positions, such as being head of a division, is what sets workers on the path towards leadership positions, women tend to only reach c-suite roles in areas such as human resources or administration. Over 300 companies in the Russell 3000 Index have appointed new CEOs over the past year, but only 26 were women.

Why does this matter? Historically, boards have been reluctant to promote executives with limited P&L experience to CEO, meaning an under-representation of women in these business areas at the top level, even if there are women in other c-suite positions, is one factor in the persistent lack of female CEOs.

It has been reported gender imbalances emerge from as early as the first promotion point – women account for 48% of entry-level hires but only 38% of first-level managers, with a clear knock-on effect for equality in higher positions.

Separately, some sectors, such as financial services, which may be gateways to profit-making areas of any business, have struggled to attract and retain women. Initiatives designed to encourage women into these business areas have had limited rates of success, resulting in an unbalanced pipeline, while non-profit-related areas, such as marketing, human resources, PR and administration, have long been dominated by women.

In news that suggests hope for the future, women now make up a majority of college-educated workers in the US, while retailer H&M announced its first female CEO last week.

Lateral thought from Curation – As stakeholder priorities shift and a greater awareness of ESG-related issues emerges, is it still appropriate to favour those with P&L experience for the CEO role?

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Nick Finegold is Founder & CEO of Curation Corp, an emerging and peripheral risks monitoring service.


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