A comprehensive six-year study from the Tuck School of Business at Dartmouth University, which analyzed 10,000 high-ranking executives at Fortune 1000 companies, paints a much clearer picture about why there are so few female CEOs in major companies.
The study revealed that nearly 50% of the largest U.S. firms lack female top executives, 7.2% had more than two women in the top ranks, and a mere 2.6% had more than three.
As judged by the number of female CFOs and other female executives with direct profit-and-loss responsibility, the authors estimate that the proportion of female CEOs will increase from the current level of about 1.7% to about 4.9% in 2010 and 6.2% in 2016.
“Even though 6.2% is more than triple the current percentage, it doesn’t seem very impressive when one considers that by 2016 it will have been about 40 years since women entered corporate management in force,” the study’s authors wrote in the report.
The investigation began in 2000, when the professors gathered biographical information for each individual whom companies in the Fortune 1000 listed in the Securities and Exchange Commission corporate proxy statements and reports.
The final database for the study consisted of 9,950 individuals (9,129 men and 821 women), each of whom was assigned to one of seven top corporate levels. Level one was CEO or board chairman; level two was second-in-command (i.e., president or COO); and levels three through seven were each a further step down in the hierarchy.
The seven female CEOs in the sample represented 0.63% of the total executives at level one. Women constituted 1.65% of the executives at level two, 6.40% of those at level three, 10.43% of those at level four, and 12.80% of those at level five.
The study analyzed executives’ ages, the functions they performed, whether they held line or staff positions, and how long they had been with the company. The study also found that the industry strongly influenced the number of female executives in a company. For example, high-ranking executive women constituted:
- 3.8%, trucking
- 13.1%, soaps and cosmetics
- 13.4%, computer software
- 15.7%, transportation equipment
- 4.2%, furniture
The study also indicates that while women are underrepresented in line and finance positions, they are overrepresented in accounting and legal affairs and hold their own in strategy and information technology.
Recruiting From the Available Talent Pool
The study’s authors say “getting more qualified women into the executive hierarchy is critical. Companies achieved greater representation of women in the top executive ranks through aggressive promotion and hiring, policies that companies lacking women executives could emulate.”
Yet the study notes that aggressive hiring and promoting of women also required an available talent pool, which was still a major issue that needs to be addressed.
“This has particular import for the still low proportions of women in line positions, which are an important route to the top of the executive hierarchy. Unless firms find ways to move women into line positions and retain them, the route to the top will remain much more difficult for women than for men,” the authors note.