Women are losing ground in the C-suite. The newest S&P Capital IQ found that only 21 women held the top job among S&P 500 companies. This is down from 25 in 2014.
The report is a result of analysis of CEOs running S&P 500 companies between 2006 to 2015. Where multiple CEOs existed for a company, the longest serving would be counted. Overall, the study is not only a good indication of trends because of the length of time examined, but it’s an important measure, as this group of companies accounts for about 75% of the U.S. equity market by capitalization.
Taken together with some other recent studies, the gender diversity picture is still starkly off balance. For example, McKinsey and LeanIn.org found that we are more than 100 years away from seeing women occupy the C-suite in half of the major businesses in the U.S.
Although more than 50 years have passed since the Equal Pay Act was signed into law, one estimate from the Institute for Women’s Policy Research indicates it could take until 2056 to actually achieve parity.
Among the S&P Capital IQ’s findings, several trends stood out:
- The gender gap at the CEO level of S&P 500 companies is not closing, as the growth rate for new female CEOs is only one for every two years.
- 2015 female CEOs lag behind their male counterparts’ tenure by two years.
- Although the information technology sector has the most female CEOs, there are none in energy, materials, or telecom.
In 2006, there were only 16 women at the helm of S&P 500 companies. That’s increased to 21 this year, but still represents a decline from a high last year. Percentages better illustrate the imbalance of power. The S&P 500 had 3.2% female leadership in 2006, and today it has only grown to 4.2%. The overwhelming majority of men is only 1% lower, at 96%, than it was a decade ago.
“As gender diversity is increasing in global companies, and more and more women join the workforce, it seems only natural that more females should assume the leadership CEO positions,” writes Pavle Sabic, director of market development of the S&P Capital IQ and author of the study.
But that hasn’t been the case, as this and other studies prove.
It’s not that there isn’t a business case for having more women in charge. Widely cited research by Catalyst demonstrates that companies with higher female representation in top management outperform those that don’t by delivering 34% greater returns to shareholders. And although only 5% of Fortune 1000 companies have a female CEO, they generate 7% of the Fortune 1000’s total revenue and outperform the S&P 500 index during the course of their respective tenures.
It may be for lack of opportunity. As research from the Rockefeller Foundation and the Thomson Reuters Foundation reveals, nearly half (47%) of the women surveyed in the U.S. believe men have better access to professional development and career growth opportunities than they do. The U.S. ranked 10th in comparison to other countries in the G20, who believe men have better access to these types of opportunities.
However, both the McKinsey/LeanIn.org study and recent Harvard Business School research indicate that women are more cautious about taking a promotion, and that there’s an ambition gap between men and women as they eye the top spot.
One of the study’s findings indicated that on average, men hold the CEO job longer than women. As Sabic points out, the median tenure of female CEOs is four years, while the median tenure of male CEOs is a slightly higher at six years. “While four to six years is not largely significant in the context of a lifelong career,” he explains, “it may translate to a significant economic opportunity cost to women.”
In the U.S. banking industry, for example, among organizations that publicly file compensation data, there’s a costly gap for female CEOs. Compensation for men increased more than 60% between 2007 and 2014, while female bank CEOs’ earnings only climbed about 33%.
In contrast to the statistics made public about the lack of gender diversity in this industry, tech companies in the S&P 500 appear to show a different picture. In the information technology sector, there are five women CEOs, the most out of the 10 industries that make up the index. Among them: Ursula Burns of Xerox, Virginia Rometty of IBM, Marissa Mayer of Yahoo, Safra Catz of Oracle, and Meg Whitman of HP.
“In the 21st century, it is safe to say that info tech has established itself as the sector that leads innovation in business,” writes Sabic. “At this stage, it also seems to be driving–be that at a slow pace–the number of females at the CEO level in S&P 500 Companies.”