Gender Diversity in the C-Suite

Research shows that adding women to the C-suite changes how companies think.¹ Women executives impact how the C-suite approaches strategy and innovation. Simply put, women in executive leadership is good for business. And yet, women are still vastly underrepresented in the top leadership teams at America’s largest public companies.

In Russell Reynolds Associates’ analysis of the top 100 companies in the S&P500 (referred to as the S&P100 in this report), we found that men are 2.5x more likely than women to be executives in the top leadership teams. The roles in which women are well-represented are those that hold far less power and influence, highlighting the limitations of gender diversity and the perceived value of women in these organizations.

Closing the gender gap at the top remains a priority for companies as they continue to face increased scrutiny from stakeholders who demand progress on DEI. While there are currently no federal laws mandating gender diversity in executive leadership in the US, shareholders are driving action through a rise in proposals that are calling for boards to commission DEI Audits. These audits aim to examine how under-represented groups are impacted by workplace practices and policies, with an aim to evidence progress against DEI objectives. But as momentum for progress grows, so does the risk of contention from opposing bodies who are calling into question the legality of DEI targets. Organizations have an opportunity to realign their diversity efforts with their business objectives and focus on the importance of embedding equity into their talent practices as an enabler for all groups. Naturally, this will have a bearing on how organizations manage pipeline diversity and representation at the top.

While there is extensive research on the benefits of gender diversity of leadership and management teams, there is limited analysis specifically on gender diversity of the C-suite. For our analysis, we examined the top leadership teams—as stated by the companies themselves—of the 100 largest organizations within the S&P500. We compared the composition of those teams with the US civilian workforce participation rate by gender from the US Bureau of Labor Statistics. The size and nature of top leadership teams varies across organizations, ranging from 16 executives on average to 45 executives on the largest team and just three executives on the smallest team. A company’s disclosure of whom it chooses to state as part of its top leadership team is not only a factor of organizational structure, but also an indicator as to whom the company values and where power and responsibility reside.

By focusing our analysis on the top leadership team, we can move past the generalities of gender diversity in leadership toward a more substantive analysis of those with the highest power and influence. Principally, this avoids the blurring of leadership levels, which can result in an overly rosy picture in which progress on gender diversity at the next generation leadership level masks the real, typically more limited level of progress at the very top.

Key Finding 1: A long way from parity

There are 69% fewer women executives in leadership teams than there are in the US workforce. While women account for 47% of the US workforce benchmark, they account for just 28% of all executives in the top leadership teams of the S&P100. Comparably, men account for 53% of the US workforce benchmark and account for 72% of the executives in those top leadership teams.

^{Source: RRA Proprietary Analysis, S&P100 Leadership Teams, 2022 (n=100 companies, 1583 executives); Bureau of Labor Statistics, 2021 “Employed persons by detailed industry, sex, race, and Hispanic or Latino Ethnicity”, https://www.bls.gov/cps/cpsaat18.htm}

Key Finding 2: Underrepresented where it matters most

Only 9% of CEOs in the S&P100 are women. There needs to be 5.2x the number of women CEOs to be at parity with the workforce benchmark. The traditional CEO feeder roles of CFO, COO and P&L leaders show significant underrepresentation of women, which makes the path toward CEO that much more difficult. In looking at the COO role (10%), we would need to see 4.7x more women in the role to reach parity, and 2.6x more women in the CFO role (18%) to reach parity with the workforce benchmark. As a result, there cannot be measurable progress on gender diversity in the CEO role unless organizations are more accepting of variance in the backgrounds of the executives brought into the CEO role.

There are two roles in top leadership teams that are commonly occupied by women—CMO (47%) and CHRO (67%). While this shows great progress toward gender parity, not all companies include the CMO role as part of their leadership team, further limiting the value and influence of women in the top ranks. We also see promising results in the GC role at 41%, just below the workforce benchmark at 47%.

As highlighted above, the CHRO role has the highest percentage representation of women among all leadership roles analyzed. While the CHRO has always played an important role in an organization’s success, the role has only grown in significance over the last two years due in large part to the coronavirus pandemic and the ongoing civil unrest in the US. A successful CHRO helps employees feel supported and encouraged, while also leading with empathy and strategic foresight through tough cost-cutting decisions. Despite this, the path to CEO is still quite limited for those in the CHRO role. Most notable, according to Russell Reynolds Associates’ 2022 Global Leadership Monitor, only 1% of CHROs that we surveyed agreed that their career goal was to become a CEO.

^{Source: RRA Proprietary Analysis, S&P100 Leadership Teams, 2022 (n=100 companies, 1583 executives); Bureau of Labor Statistics, 2021 “Employed persons by detailed industry, sex, race, and Hispanic or Latino Ethnicity”, https://www.bls.gov/cps/cpsaat18.htm}

Key Finding 3: Conspicuous in their absence

Although gender representation within the broader executive population of the S&P100 leadership teams is important, it varies considerably across companies. With this in mind, we shifted our analysis to each individual leadership team and only included those companies with a stated leadership team of seven or more executives (95 companies in total).

Two of the companies have leadership teams comprised of all men; a further seven companies have only one executive who is a woman. There are only four teams with 50% or more women executive team, although none of those teams can be described as having a supermajority representation (2/3rds) of women executives.

At present, only five companies (with seven or more executives on leadership team) are at gender parity with the workforce benchmark. We wanted to understand how far off the remaining companies are from the workforce benchmark, and what meeting it would mean in practical terms. To do this we looked at the impact of the next available vacancy in a leadership role being filled by a woman — in this scenario, an additional 8 companies would reach parity with the workforce benchmark. If the next two vacancies were filled with women, an additional 15 companies would reach parity; adding three women executives, an additional 22 companies would reach parity; and in adding four women executives, another additional 15 companies would reach parity with the workforce benchmark.

It’s important to note that in this analysis we held the size of the leadership team constant (i.e. each vacancy would be a replacement hire, rather than an additional role on the leadership team).  Expanding the number of seats at the table is a viable strategy for improving gender diversity too, however, it is important that roles that get added to the team are giving the relevant resources and positional power to be influential within the leadership team and on a level-pegging with other more established roles.

^{Source: RRA Proprietary Analysis, S&P100 Leadership Teams, 2022 (n=95 companies, 1561 executives);}

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Authors

Gabrielle Lieberman and Tom Handcock of RRA’s Center for Leadership Insight conducted the analysis and authored this report.

Learn more about the authors and The Center for Leadership Insight

Additional reading 

External References

_{¹ Research: Adding Women to the C-Suite Changes How Companies Think, Harvard Business Review, 2021 Research: Adding Women to the C-Suite Changes How Companies Think (hbr.org)}

_{² SB 826 - California Senate (20212022) - Open States}