By Sarah Williamson & Tara Castelino
Women have historically been underrepresented in high-level positions as CEOs or owners of companies. While the increase in the percentage of women in these positions has increased greatly over the past couple of decades, men still dramatically outnumber women at this level of management. According to a 2022 study, there are still more than ten times as many companies with a male CEO or owner than a female CEO or owner (Catalyst, 2022). This suggests that while we’ve seen progress since the early 2000s when female CEOs made up less than 2% of Fortune 500 CEOs, there is still work to be done as women now make up only 15% of Fortune 500 CEOs (Buchholz, 2022). It should be noted that this number has doubled since it reached 7.4% in 2020, suggesting an increase in how quickly female representation in leadership is growing (Pew Research Center, 2018).
To continue seeing female representation in leadership roles grow, there may be a need for policy implementation. Some recommendations include mandatory training on how to eliminate bias in hiring processes and more family-friendly policies that cater to women (Sanchez & Frey, 2020). Several European countries have also implemented quotas for corporate boards, requiring that women make up a specified percentage of the board membership (Sanchez & Frey, 2020).
If women continue to be left out of high-level positions, firms will suffer as well as women. Studies have shown that when women are in leadership roles, firms are more productive, and women are paid better and have better working conditions (Sanchez & Frey, 2020).
These issues impacted us on a personal level as we are both women studying economics who want to enter the competitive finance realm and hope to be successful in our field. It was disheartening to learn about the reasoning behind why women don’t earn executive positions in businesses. With the leading reasons being women are held to higher standards and employers are just not ready to hire/elect women leaders it became clear that the lack of women in executive positions is mainly based on preconceptions. This proves that even if women were to be tougher, had ample connections and didn’t have family responsibilities, they still wouldn’t be elected to leadership positions. Overall, we’ve garnered from our research that women don’t lack sufficient skills to be in executive positions but rather face a lack of confidence in their abilities from employers and peers. Learning this has shifted our worldview to be a bit more pessimistic and hopeful that policies will be put in place to encourage women in executive positions. One research question of interest we wanted to ask based on the patterns we observed is what is the reasoning that women are given when not hired for executive board positions. Another research question based on the issues studied is what skills do men typically have that women don’t that would make them more successful in leadership roles. Finally, we hope this blogpost sheds light on the true reason women aren’t hired as CEOs and raises awareness that they are as capable as men to handle the job.
Buchholz, K. (2022, March 10). How has the number of female CEOs in Fortune 500 companies changed over the last 20 years? https://www.weforum.org/agenda/2022/03/ceos-fortune-500-companies-female/#:~:text=2022%20is%20seeing%20a%20new,and%20only%207%20in%202002.
Catalyst. (2022, March 1). Women in Management (Quick Take). https://www.catalyst.org/research/women-in-management/?utm_source=pocket_mylist
Pew Research Center. (2018, September 13). The Data on Women Leaders. https://www.pewresearch.org/social-trends/fact-sheet/the-data-on-women-leaders/?utm_source=pocket_mylist
Sanchez, D. V., & Frey, E. F. (2020). Where do females rise to leadership positions? A cross-sector analysis. Applied Economics Letters, 27(15), 1252-1255.