Progress on pay parity and bridging the gender divide has been promising but a striking gulf still exists between the careers of women and men at the top.
Business schools are promoted as champions for slashing gender inequality but the debate about diversity at the world’s leading schools and top blue chip companies continues to rage. The two are linked, believes Cristina Sassot, admissions director at ESADE Business School in Spain.
She says business schools can promote the presence of women on boards through facilities in the admissions process, with provisions for funding and accommodation.
Questions remain as to whether the push to secure more females at board tables has done anything other than widen the gap between the elite few and women in business generally. There is political and business pressure on companies and universities to secure gains.
Recent analysis of data from 110 of the world’s best business schools found that mean female representation is just 34%. But women account for 43% of GMAT entry test takers globally, according to figures from the Graduate Management Admissions Council.
This mirrors the business landscape. Cranfield School of Management’s widely reported annual Female FTSE board report shows women account for 23.5% of FTSE 100 board positions, up from 20.7% a year ago. This is short of the UK government target of at least 25% by the end of 2015.
There are only five women chief executives among FTSE 100 groups – at EasyJet, Imperial Tobacco, Kingfisher, Royal Mail and Severn Trent.
Professor Susan Vinnicombe CBE, director of the Cranfield International Centre for Women Leaders, says there has been significant progress. But she adds: “The burning issue remains that not enough women are being appointed to executive director roles in the UK.”
This is not just a UK problem. In the US, just 23 of Fortune 500 firms have a female chief executive – among them are the chiefs of IBM, Hewlett-Packard and Pepsi Co.
This is alarming for business schools and companies alike because recent studies suggest that significant levels of women quit the workforce when they reach managerial level – ranks an MBA opens doors to.
Figures from the OECD show that in Mexico and Greece 46% and 42% of women are in employment. But Grant Thornton research found that the proportion of female senior managers in those countries was around just half those levels. Women account for just 22% of global senior management positions, according to the professional services firm.
Amanda Goodall, a senior lecturer in management at Cass Business School, writes in BusinessBecause that there is a “confidence gap”, shown in the evidence that women are more likely to absorb negative feedback than their male colleagues.
Business schools are keen to find solutions. Research by Isabel Fernandez-Mateo, an associate professor at London Business School, found for example that search firms are more responsive to pressure and incentives to hire more women for top management jobs than client firms.
One persistent problem is the gender wage gap. Women in the US are paid $11,000 less than men, according to Catalyst, a non-profit women’s advocacy and research group.
The gulf starts early and gets bigger as women move up the corporate ladder, says Anna Beninger, director of research at Catalyst, in an interview with BusinessBecause. Catalyst has tracked about 10,000 MBAs since 2007 and found women are earning $4,600 less than men on average in their first post-MBA job, and are more likely to begin in an entry level position.
“This is a call to action for organizations,” Anna says. “They need to step up,” she adds.
Companies have drawn criticism when targeting female MBA students in the past. McKinsey & Co has invited female MBAs to a “mani/pedi” recruitment event in Palo Alto. Goldman Sachs once handed out goody bags to potential female recruits containing mirrors and nail files with the US investment bank’s logo on them.
Companies need to focus on recruiting top female talent but also on making sure they can progress, says Elissa Ellis-Sangster, executive director at Forté Foundation, an organization that promotes women’s business careers through access to education.
“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 says.
Progress has been made. Research showing the benefits of more diverse boardrooms to profitability and shareholder value has been widely discussed.
Helena Morrissey CBE, CEO of Newton Investment Management and founder of the 30% Club, which campaigns to get 30% women on FTSE 100 boards, says: “Organizations now realise that having a better mix of men and women at all levels is key to developing a modern culture.”
More women are graduating from university and this is a contributing factor, say experts.
Business school graduates have risen to the top – including Mary Barra, CEO of General Motors, the world’s third largest automaker by sales, who earned an MBA at Stanford, and Irene Rosenfeld, the chief executive of global food group Mondelēz, who has an MBA from Cornell.
George Washington University Business School has taken a lead in this area. It launched “On the Board” – a course that seeks to advance women’s corporate board leadership – in collaboration with the International Women’s Forum, which ended last year.
Chris Storer, executive director of graduate programs and admissions, says the goal of the program was to be recognized as a major global initiative for advancing women’s executive careers.
Most schools recognize the need to diversify. “Business Schools can do a lot to help women,” says Professor Ginny Gibson, deputy dean of the UK’s Henley Business School.
Last year the Henley Women in Leadership Forum was launched, with more than 150 women attending. The school also invites female chiefs to speak at its campuses, including Dido Harding, the CEO of telecoms group TalkTalk, and has partnered with the 30% Club to offer a fully funded scholarship to women for its MBA programs – which Ginny highlights as a particular problem in terms of gender diversity.
“This is critical in helping women to gain the wider strategic perspective and confidence they need to move into very senior roles,” she says. Between 35% and 45% of the Henley MBA each year is comprised of women.
In the US, Harvard Business School announced plans this month to launch a new recruiting program that targets students at women-only colleges.
MIT Sloan School of Management, based in Massachusetts, hosts women-specific recruiting events on campus, such as its Women’s Ambassador’s Day and Women’s Week. Female students enrolled in its two-year MBA program comprise 40.7% of the student body – a record.
Dawna Levenson, director of MBA admissions at MIT Sloan, says that gender parity is a self-fulfilling prophecy. “The more women you have in the program, the more women you will attract.”
The gender divide is bad for business. Companies can struggle to retain their most prized female employees to the point of senior management. Women are also looking at entrepreneurship as a viable career path.
Role models are important but this can be a challenge if there are so few women at the top of companies, says Elissa at Forté Foundation.
But she believes business school is a valuable tool for women to advance their careers. “Business school is helpful for creating leaders for the future.”
Yet as Anna at Catalyst points out, there has over many decades been a sense that more women needed to pursue education and training. “We're so far past that; women are getting more degrees than men,” she quips. “It’s the structure of companies that needs to be changed.”