Education and workforce participation have the greatest impact on getting women into the boardroom, according to a landmark study commissioned by BNY Mellon, the bank, and led by Cambridge Judge Business School.
The research looked at 1,000 companies from the Forbes Global 2000 list, across nations and sectors, and found that increasing the economic power of women is a key factor in bridging the gender gulf at the executive level.
Business schools have been scrambling to increase the numbers of women in their programs — aiding the down-up approach to boardroom diversity — as political and business pressure mounts on companies to close the gender gap.
Education and participation are key to increasing economic clout, according to the study, also commissioned by Newton Investment Management.
“Empowering women outside the boardroom is key to getting women into the boardroom and keeping them there — potentially becoming a virtuous circle,” said Helena Morrissey, Newton Investment Management CEO and Cambridge Judge advisory board member.
Countries’ collective values and beliefs about gender egalitarianism and assertiveness are bigger influencers than previously thought, the study found.
“Global variation in female rise to boards is much more complex and nuanced than the simple categorization of ‘developed versus emerging economies’,” said Sucheta Nadkarni, professor of Chinese management at Cambridge Judge who led the research.
The findings come as separate analysis for the Professional Boards Forum, an organization that seeks to raise the number of women directors, shows that more than half of FTSE 100 firms had less than 25% female boardroom representation.
This is short of a government-commissioned report in 2011 that set the target that FTSE 100 boards be at least one-quarter female by the end of 2015. More than 50 companies need to appoint one woman or more to meet the target.
When Alison Brittain becomes head of Whitbread in January, she will be only the sixth female FTSE 100 chief executive officer. The current five are Carolyn McCall at easyJet; Alison Cooper at Imperial Tobacco; Véronique Laury at Kingfisher; Moya Greene at Royal Mail; and Liv Garfield at Severn Trent.
Campaigners have argued that increasing the number of women in professional management education will help to close the gender gap.
GWU School of Business ran a course that seeks to advance women’s corporate board leadership — in collaboration with the International Women’s Forum — up until last year.
Chris Storer, executive director of graduate programs, said its goal was to be recognized as a major global initiative for advancing women’s executive careers.
Professor Ginny Gibson, deputy dean of the UK’s Henley Business School, said that business schools can do a lot to help women. Henley invites female CEOs to speak at its campuses, including TalkTalk chief executive Dido Harding, and partnered the 30% Club, which campaigns to get 30% female representation on boards, to offer scholarships to women for its MBA programs.
“This is critical in helping women to gain the wider strategic perspective and confidence they need to move into very senior roles,” she said.
Cristina Sassot, admissions director at ESADE Business School in Spain, agreed that business schools can promote the presence of women on boards through funding and accommodation initiatives.
At INSEAD, more than €330,000 in scholarship funds has been allocated to women. Nearly 50% of INSEAD’s total scholarship pot has been given to female students.
London Business School partnered with Lloyds Banking Group, the UK government-backed lender, which will invest more than £700,000 in MBA scholarship funding for women over four years. Bank of America Merrill Lynch, Morgan Stanley and Deutsche Bank run similar schemes.
Forté Foundation, an organization that promotes women’s business careers through access to education, offers scholarships to a number of business schools including Oxford, Rotman and IESE, and has provided $68 million to more than 3,000 candidates.
Dawna Levenson, director of MBA admissions at MIT Sloan School of Management, said: “The more women you have in the program, the more women you will attract.”
Education may help get more women into companies but Elissa Ellis-Sangster, executive director at Forté Foundation, said companies need to do more to ensure they can progress.
“Being open and honest and transparent about the future that is available to women, so they can see themselves making those strides up the corporate ladder, is important,” she said.
Anna Beninger, director of research at Catalyst, the non-profit women’s advocacy and research group, said that the structure of companies needs to change for gender diversity to be improved. “They [companies] need to step up,” she said.
Some European countries have introduced quotas for boardrooms. But the Cambridge Judge study found that quotas are of limited value because they have no significant impact on keeping women in their boardroom positions.