A new decade may have dawned, but when it comes to women at the highest levels of leadership in corporate America, the forecast is only partly sunny. According to results of Grant Thornton International’s 2020 Women in Business survey
, the state of women in business in 2020 is indeed a mixed bag of news.
On the one hand, fewer women are serving in key C-suite roles overall, with 28% of US organizations citing they have women in senior management positions compared to 2019 levels of 31%. Decreases also occurred in the COO role (16% in 2020 vs 21% in 2019), CFO role (28% in 2020 vs 32% in 2019) and Chief Controller role (a drop from 17% in 2019 to 13% in 2020).
However, a bright spot of progress is evident in the number of women holding CEO roles. The good news is the percentage of women holding CEO roles nearly doubled, jumping from 14% in 2019 to 26% in 2020. More women are also serving as CIOs (increasing from 17% in 2019 to 19% in 2020).
Note to women: It’s not you, it’s them
Why aren’t more women holding senior leadership roles? It’s not like they don’t have what it takes. Considering women now represent more than half of the college-educated workforce (50.2%), according to Pew Research Center data,
and women earn about 40% of M.B.A. degrees in the U.S., the lack of women in key C-suite roles is concerning.
Further, a University of Chicago and Copenhagen Business School study
found that there was no difference among women and men when predicting whether a job candidate will become a CEO, CFO or other high-ranking executive based on four factors — general ability, execution skills, charisma and strategic skills. Yet, women were 28% less likely to be hired as CEOs.
Why the disconnect? A recent WSJ study of executives at the top 3,000 public companies revealed one possible reason: P&L positions, typically stepping-stones to the CEO office, typically go disproportionately to men. Women are more likely to be elevated to senior leadership positions in human resources, legal or other areas that don’t place them on the CEO track.
This insight is further supported by the most recent Women in the Workplace
report that organizations may be making inroads in diversity efforts at the most senior levels but have not fixed the “broken rung” women face on that all-too-important first rung up the career ladder from entry level to manager. According to the report, for every 100 men who are promoted or hired to manager, only 72 women reach that level. As a result, more women stay stuck at the entry level, with fewer women able to advance to senior leadership positions.
A long-time advocate of developing opportunities for women in the workplace, David Hazels
, National Managing Partner, Advisory Services, said, “I contend we are a much better advisory and consulting practice by having a diverse set of practitioners because it’s more representative of our clients and the leadership roles in their organizations.”
He added, “It’s critical for senior leaders to be purposeful and deliberate in increasing visibility for women along their entire career continuum and elevating them to senior management roles.”
“It’s critical for senior leaders to be purposeful and deliberate in increasing visibility for women along their entire career continuum and elevating them to senior management roles.”
David Hazels, National Managing Partner,
Grant Thornton LLP
Hazels underscored the importance of identifying young up-and-comers earlier in their career. Hazels related how he recently tapped three females to fill key roles. One woman, in particular, was someone he had identified early in her Grant Thornton career as having the talent to move up the career ladder.
“You need to recognize that kind of talent exists earlier in their career,” Hazels explained. “It’s like art; you know it when you see it.”
Developing top female talent for senior leadership roles within Advisory Services, Hazels said, actually starts at the college recruiting stage. Currently, Grant Thornton’s Advisory Services practice recruits about 45% females and 55% male. “You need to evaluate your recruiting efforts to make sure you’re hiring the right female talent that you can accelerate through the system,” he said. “And you need to plan for all the points along the way in their career trajectory that may cause them to leave the organization or profession.”
Consistent coaching and training opportunities are one way to ensure female talent don’t get stuck at the midrung of the career ladder. “Start to recognize their leadership qualities early,” Hazels said, “and actively foster those strengths through mentorship and coaching.”
“To take action towards greater inclusion of women, senior leaders can use succession planning as an opportunity to set goals which align with this strategic priority and also create measurement objectives. What gets measured gets done!”
Jennifer Hoffman, Partner,
Grant Thornton LLPJennifer Hoffman
, Grant Thornton Partner, Audit Services, noted that elevating women into senior leadership roles is an intentional process. “Succession planning must be done with intentionality, especially for leadership roles,” she said. “Most know that in order to effectively transition a leadership role, the process starts long before a leadership role becomes vacant. Most mature organizations consider succession planning to be a priority, and many have it as part of their mid- to long-term strategic planning activities.”
Hoffman added, “To take action towards greater inclusion of women, senior leaders can use succession planning as an opportunity to set goals that align with this strategic priority and also create measurement objectives. For example, strategically planning for X% of leadership roles to be held by women by 20XX creates a measurable goal with an end point. What gets measured gets done!”
Speaking to an audience at the recent Involve & Audeliss CEO Panel Breakfast hosted by Yahoo Finance
, Sallie Krawcheck, CEO of Ellevest, a digital investing start-up focused on women, pushed back against the notion that it’s entirely in women’s hands to achieve their career goals.
“In an era of know your worth, take the seat at the table, you go girl, you got this, you know if you didn’t get the raise this time, you didn’t read the book closely enough. You better underline it, you better notate it, go back in there. It’s just a matter of working harder. What I would say is, sometimes it’s not you. Sometimes you work for a Todd,” she said.
“Todd,” as described by Krawcheck, is not necessarily a man or a woman, but a manager who talks about supporting women and minorities in the workplace but doesn’t always follow through. “He or she went to unconscious bias training class...talks about how they’re woke, but just never seems to promote anybody but someone who looks like him- or herself,” she said.
Unraveling the unconscious bias challenge
From recruiting to hiring to promotions and work opportunities, unconscious bias plays a critical role improving gender balance and inclusion. As a 2018 Harvard Business Review article
notes, too often organizations adopt a “think manager, think male” logic.
But organizations are slowly recognizing the role that unconscious bias plays in their culture. According to Grant Thornton International’s study, the percentage of US organizations that now offer unconscious bias training jumped from 20% in 2019 to 24% in 2020. (Grant Thornton US is offering unconscious bias coaching to its US employees.) Yet, overall, only a fifth of senior leaders discuss unconscious bias openly.
What exactly is “unconscious bias”? Miriam Oh, Grant Thornton Director, Private Equity, defines unconscious biases as “learned stereotypes that are automatic, unintentional, deeply ingrained, universal and able to influence behavior.”
“This occurs outside of one’s consciousness, which makes it very challenging to address and overcome,” Oh said. “The good news is that many companies have realized this systemic problem and have established diversity and inclusion programs throughout Corporate America.”
One sign of progress is that there’s a female board member at every Fortune 500 company. However, only 5% of Fortune 500 CEOs are women, Oh noted. There’s even more disparity in specific industries. “For example, in the private equity industry, a recent Bloomberg study found that only 8% of senior investment roles globally at the largest investment firms are held by women,” Oh said. “So while clearly there’s been a lot done to address the gender diversity and inclusion issue, we still have a long way to go.”
Acknowledging the issue and addressing it are two very different things. However, there are small actions that male and female colleagues can take to move the needle on progress. “One example I’ve seen that has been effective involves a situation where a woman has an idea but she knows she’s not being heard,” Oh suggested. “Her male colleague can present the idea again. If it’s something the team believes is something they should move forward with, he can attribute it back to the female colleague.”
Oh added, “It just requires a lot of action and training and reinforcement of the fact that women’s views should be heard.”
Karen Hudson, Grant Thornton’s Chief Sales Officer, offered an example of how ingrained an unconscious bias can be and action that can be taken to correct it. “Several years ago, I was in an important presentation at a privately owned company,” Hudson explained. “They were going to outsource many of their services to us, and the key decision-makers were the CFO and the CIO, who were both women. I was the only female on the presentation team, and one thing I noticed is that the men on the team kept talking to the men in the room. I called a time-out and on the break said, ‘Do we recognize that the decision-makers here are the CFO and the CIO? Look at them and make your points to them.’ We very consciously, as a team, then changed our interaction style for the second half of the presentation and, through a prolonged journey, won the work.”
"We have to commit ourselves to overcoming our own bias and help our male colleagues to overcome their unintentional biases because these biases are just deeply ingrained and we all have to work very hard to overcome them.”
Karen Hudson, Chief Sales Officer,
Grant Thornton LLP
Hudson believes the “think manager, think male” mindset cuts across our society and is tied to those deep mental connections that most people have to work hard to overcome. “All men have to work to overcome that ‘think manager, think male’ perception by really focusing on the skills and attributes that each person is bringing to the role, not assuming that a women who has children, for example, wants a lighter workload or is more constrained,” she explained.
“We have to commit ourselves to overcoming our own bias and help our male colleagues to overcome their unintentional biases. They’re not mean-spirited; these biases are deeply ingrained and we all have to work hard to overcome them,” Hudson added. “So we need to look around in our organization and ask ‘Who can I be giving more responsibility to?’ ‘How can I be reaching out and asking for more responsibility so I can make a bigger impact and I can help lift up the people around me?’”
Grant Thornton’s Hoffman added, “I truly believe that in the majority of organizations, the C-suite and senior leaders are not consciously taking actions to be biased against women. We all develop unconscious bias as we move through life. It is inevitable. Becoming aware of our biases and learning to recognize when they present themselves and taking action to react differently is the fundamental opportunity to move the needle. As organizations invest in unconscious bias training and continuing education in this space — especially at leadership levels and in the recruiting processes — visible, positive changes will occur.”
The importance of actively advocating for women “To help build a truly inclusive culture for our firm, I will set an intentional example in casting a wide net and creating new development opportunities for women to serve as our next generation of leaders.”
Brad Preber, Grant Thornton CEO
Many organizations recognize that intervention is needed to change unconscious biases and embrace gender balance and inclusion. Grant Thornton CEO Brad Preber
acknowledged the importance of a gender diverse and inclusive culture. “To help build a truly inclusive culture for our firm, I will set an intentional example in casting a wide net and creating new development opportunities for women to serve as our next generation of leaders.”
One way to accomplish these goals is through formal training programs. According to Grant Thornton International’s survey, in 2020, a little more than a third (34%) of organizations are providing mentoring and coaching.
Within its Advisory Services practice, Grant Thornton launched a Sponsorship Protégé Program in December 2019 as part of its Women’s Sponsorship and Mentoring Program in an effort to advance the development and progression of women leaders through a formal program focused on identifying, cultivating and advocating for women professionals. It also aims to provide accountability for advisory leadership to be active in providing this kind of support and skill and insight to women.
The sponsorship program launched with 71 senior manager and director protégés and 53 senior-level (Principals, Partners and Managing Directors) sponsors who meet monthly for individualized interactions. A 12-month curriculum focuses on authentic leadership, engaging with purpose and connecting and belonging.
Grant Thornton Director Lisa Carrol explained that “In order to make improvements in gender representation within our Advisory Services leadership, in partnership with Catalyst we co-created a strategy that identified four executable work streams to include intentional sponsorship and mentoring, recruiting and hiring differently, creating trusted leadership, and metrics and accountability.”
Sarah Rawes, Grant Thornton Manager, Operations Transformation added, “The program sets out to create a support system allowing for intentional and safe dialogue among the participants, both within their one-on-one relationships and within the broader community. The opportunities for personal and professional development are really the sky’s the limit, so it is up to the sponsor and the protégé to create a plan that is individualized for their needs.”
Sponsorship is all about active advocacy. As Rawes explained, “While a mentor talks with you, a sponsor talks about you. The role of a sponsor is to advocate. It is to talk about your protégé in the places where it matters. It’s to know them well enough so that you can go and do that. You can get their name out there, and you can make them known and help them in that way to get to the next level in their careers.”
The time to act is now
While many companies are taking steps to improve gender diversity and inclusion (D&I), there is still a ways to go. Just under a fifth (18%) of US senior leadership teams responding to Grant Thornton’s survey are taking no action to improve gender balance.
However, other organizations are making inroads in implementing specific measures to improve gender balance. A quarter of respondents indicated they are linking senior management rewards to progress on gender diversity (up from 17% in 2019). Another quarter of responding organizations are setting targets or quotas for gender balance at leadership levels (up from 18% in 2019).
Many of today’s organizations have not yet fully embraced inclusion, however. Only 39% of senior leadership teams are taking steps to create an inclusive culture in 2020 (up only slightly from 2019 levels of 38%).
“How inclusion diversifies and shapes the success of organizations isn’t a question – it’s a clear statement that Grant Thornton is intentional about living through its core values. We show up at our best when we reflect the landscape of the broader world - tapping into diverse mindsets and perspectives to solve challenges and create new opportunities.”
Michael Monahan, National Managing Principal,
People & Culture,
Grant Thornton LLPMichael Monahan
, Grant Thornton’s National Managing Principal, People & Culture, noted that diversity and inclusion tie directly to an organization’s values. “How inclusion diversifies and shapes the success of organizations isn’t a question — it’s a clear statement that Grant Thornton is intentional about living through its core values. We show up at our best when we reflect the landscape of the broader world — tapping into diverse mindsets and perspectives to solve challenges and create new opportunities.”
But those organizations that don’t take action now will find they will be held to account by various stakeholders. For example, institutional investors are increasingly asking boards about talent management strategies that specifically encompass diversity and inclusion. At the request of the Human Capital Management Coalition, a group of institutional investors with assets of over $3 trillion, the SEC is considering requiring public companies to disclose their human capital management practices beyond the simple employee headcount that has been required.
In 2019, over 800 CEO signatories had joined a coalition known as CEO Action for Diversity & Inclusion
and pledged to change the cultures of their companies by engaging in difficult D&I conversations with employees, educating their teams about unconscious bias, and sharing best, and unsuccessful, D&I practices.
Roadmap to gender balance and inclusion
It’s critical for organizations today to map out their strategy to move down the road to true gender balance and inclusion. The makeup of your C-suite is a continual reminder to your workforce, board, partners and stakeholders of your values and culture. It is a clear indicator that you are living your values and delivering on your promise. Cultivating a culture that is truly diverse and inclusive takes real changes. Here are a few ways your organization can get started.
- Prioritize differently
Gender diversity and inclusion needs to be treated as the business imperative it is — backed by actions, goals, rewards and metrics. Without those in place, it is unlikely any progress will be made. Some actions could include:
- Tie talent management key performance indicators (KPIs) to executive compensation. Establish people-development, D&I-focused metrics to encourage leaders to place greater focus on talent issues.
- Elevate the CHRO to a more strategic role. Require a formal talent review not just to the board annually, but also throughout the year.
- Make talent management experience, including successfully managing D&I programs, key selection criteria for new board members.
- Hire differently
Hiring that reflects both your workforce and clients requires more than just revising language in job descriptions to be gender neutral or mentioning your commitment to building D&I in your mission statement. You need to make changes to the culture from the inside out. For example:
- Make sure your organization isn’t typecasting women for positions without bottom-line responsibility (e.g., human resource directors rather than CFOs.)
- Avoid subtle biases during the interview process such as rejecting a job candidate for “culture fit” or because of a gut feeling.
- Require from hiring managers explicit and transparent feedback about potential hires.
- Measure differently
As stated earlier, what doesn’t get measured doesn’t get done. When it comes to D&I efforts, organizations need to identify specific KPIs to measure success and hold leaders accountable. Grant Thornton’s research found that diversity metrics rarely go beyond the basics. Forty-two percent of organizations track percentage of female employees and about a third measure percentage of female employees by management level (35%), percentage of female new hires (34%) and percentage of female promotions (33%). However, more than a quarter (27%) don’t measure any key elements of diversity. About a quarter (23%) measure turnover by gender and average time in management levels by gender while a quarter (25%) measure average salary for key management levels by gender.
- Promote differently
Formalize your internal leadership assessment process. Identify and communicate criteria throughout the organization. Ensure that all internal leadership assessment tools are based on an inclusive model of leadership so that women are assessed more fairly with their male colleagues. Build unconscious bias training, sponsorship and mentorship programs into your culture to help ensure you are elevating women throughout all levels of the organization. Make sure that any committee tasked with making hiring decisions for senior-level roles is fairly represented with a diverse balance.
Creating equity and removing bias in executive decisions and policies can open the floodgates for women to enter and advance in leadership positions, empowering them to contribute substantially to the business. Embracing gender balance and inclusion, and advocating for women must be a long-term commitment if organizations are to effectively leverage the talent, ideas and innovation that women bring to the table.
March 8, 2020, is International Women’s Day. An equal world is an enabled world. Take action today for equality. #EachforEqual.