How Can Companies Make the CEO Pipeline More Inclusive?

How Can Companies Make the CEO Pipeline More Inclusive?

A recent analysis from the Pew Research Center took a closer look at the gender gaps in corporate leadership in the US, focusing on top-level executive positions and the roles from which senior leaders are most commonly promoted to them. Drew DeSilver wrote up the analysis late last month at Pew’s Fact Tank blog:

Women held only about 10% of the top executive positions (defined as chief executive officers, chief financial officers and the next three highest paid executives) at U.S. companies in 2016-17, according to a Pew Research Center analysis of federal securities filings by all companies in the benchmark Standard & Poor’s Composite 1500 stock index. And at the very top of the corporate ladder, just 5.1% of chief executives of S&P 1500 companies were women.

Nor do many women hold executive positions just below the CEO in the corporate hierarchy in terms of pay and position. Only 651 (11.5%) of the nearly 5,700 executives in this category, which includes such positions as chief operating officer (COO) and chief financial officer (CFO), were women. Although this group in general constitutes a significant pool of potential future CEO candidates, the women officers we identified tended to be in positions such as finance or legal that, previous research suggests, are less likely to lead to the CEO’s chair than other, more operations-focused roles.

That women are underrepresented among CEOs and other high-level executive positions is hardly breaking news. The most interesting finding from Pew’s analysis is that three-quarters of the CEOs studied had previously held leadership roles in operations: a function where women are significantly underrepresented. At the same time, the gains women have made in obtaining executive roles in finance, legal, and HR are not putting these women leaders on the CEO track.

This finding builds on other recent research showing that although women’s representation in management has increased dramatically over the past few decades, women are still segregated into leadership roles that are less production-focused, less highly compensated, and less likely to be career stepping stones toward the top of the pyramid. We see the same thing in boardrooms: Even as more women directors are appointed, they remain less likely than their male colleagues to achieve positions of influence on the board.

If we know that CEOs are likely to come from operations, or at least need to have significant experience in that area, there’s an opportunity to have a more specific conversation about how we might get more women into that part of the organization specifically and keep them there, beyond just having more women in more leadership roles generally. Are there barriers unique to that function that must be addressed? Or perhaps, are the same barriers women face everywhere particularly high on the operations side of the business?

Either way, Pew’s findings point to a need in corporate America to make operations more inclusive and accessible. When examining the function, organizations should look not only at diversity numbers but also the extent to which current leaders in operations are creating an inclusive environment. The question is not simply “Do we have enough women?” but also:

  • Do members of this team share and fairly consider one another’s ideas and best practices for completing work?
  • Does this team use differences in opinion to identify ways to improve?
  • Do team members from all backgrounds have equitable and adequate time and resources for self-development opportunities?

Creating more leadership opportunities for women and underrepresented minorities are important goals in and of themselves, but making the workplace more inclusive is also a means of making the organization smarter and more resilient, as well as a more attractive employer in an increasingly diverse labor market where talent is looking for opportunities to learn and grow.

If your operations leaders (or any functional leaders) need help creating more inclusive teams, CEB Diversity and Inclusion Leadership Council members can use our Leader Guide to Creating Inclusive Teams to support senior leaders across functions in cultivating and leading the next-generation workforce.