Ten Accelerators to Driving Women into CEO Roles in America
As we celebrate the advent of women CEOs representing public and private companies, let us also stop and reflect. How can we further accelerate and amplify the need for all organizations to make intentional efforts to grow their pipelines of diverse women leaders, especially those with P&L responsibility?
We invite senior leaders to act on our following Ten Accelerators. If each of us commits to action, we will move the needle toward greater numbers of diverse female CEOs at an increasingly rapid rate.
The Current State
The number of women CEOs has risen to historic highs, according to the Women CEOs in America Report 2021, published by WBC with Ascend, C200 and Catalyst. We continue to salute new women CEOs in the past year including those at UPS, Clorox, Citigroup, CVS, Dick’s Sporting Goods and others. We are also so proud to honor the appointment of two Black female CEOs — Rosalind G. Brewer, CEO of Walgreens Boots Alliance and Thasunda Brown Duckett who serves as the President and Chief Executive Officer of TIAA. Our report features female CEOs from Fortune and S&P 1000 companies, Russell 3000 companies, private companies over 1 billion and entrepreneurs with more than $500 million in revenue.
Of note, Mary Barra, CEO of General Motors (GM), is the new and first woman chair of The Business Roundtable. She has the experience, talent and sponsorship to influence corporations toward the aggressive development of their pipeline of high potential women leaders in P&L roles for inclusion in CEO succession planning efforts. She is resolute when she asserts that she wants to have GM be the most inclusive company in the world and one with a robust pipeline of diverse women leaders who are managing P&Ls.
Accelerators to the CEO Role
- Recognize women’s experience, talent and acumen to be CEO Leaders
- Generate board support for women in the pipeline
- Create shareholder and stakeholder value
- Sponsor and advocate for women leaders
- Include diverse women
- Celebrate and affirm the men who are building pipelines
- Use successful Women CEO role models as examples and advocates
- Pay equal or better compensation
- Search Firms to include women in their slates
- Join and support women’s organizations focused on position, pay and power for all women
- Recognize women’s experience, talent and acumen to be CEO Leaders: Women are team builders with the necessary leadership traits: courage, risk-taking, resilience, agility, and adaptability. Women leaders express their gratitude and are more likely to share the credit. Increasingly US workers report that they want to work for purpose driven companies where culture and intentionality increase profits and shareholder value. As Indra Nooyi stated in her 2021 book, My Life in Full, “So many women in today’s workplace have extraordinary skill, intelligence, ambition, creativity, determination and good cheer.” She and others ask that current leadership build the pipelines with “ready” women.
- Generate board support for women in the pipeline: More boards are asking that women be considered for upcoming CEO and board positions. Women are averaging 42% of new appointments to boards in 2021. (Women Joining Public Boards Report). More women are leading nominating committees and in positions to advocate and support women in the pipeline to be CEOs. We are seeing an increase in the number of women serving as board chairs and chairs of audit committees. Adena Friedman, president and CEO of Nasdaq, advocated for regulations that required listed companies to present their board composition and diversity philosophy. The initiative gained support from the SEC and created momentum for more board activism. CEOs from BlackRock and State Street Global Advisors made news in corporate governance circles when they announced they voted against directors of boards where there was a lack of gender diversity and committed only investments in companies with women on the boards. Many others are making similar commitments.
- Create shareholder and stockholder value: Financial institutions and shareholders alike are asking for women to serve as CEOs. Role models include the chair of the New York Stock Exchange, Stacey Cunningham, who is the 67th president of the New York Stock Exchange (NYSE). She is the second female president of the NYSE, but the first to hold full leadership of the exchange. The same is true of Adena Friedman, CEO, Nasdaq, mentioned above. McKinsey and Deloitte reported that companies with gender and diverse leadership at the board and in the C-Suite outperform their competitors and return more value for their shareholders. Consequently, shareholders are demanding more diversity within company leadership.
- Sponsor and advocate for women’s leadership: Building a pipeline of talented women in the C-Suite requires sponsorship and advocacy and strong slates. Women CEOs move forward with the commitment to CEO slates that include women and women of color and with sponsors. True sponsors use their influence, network and credibility to create a path of upward mobility for women. Two-thirds of the women said they never realized they could become CEO until a boss or mentor encouraged them. These women focused on hitting business targets and seeking new challenges, rather than on their personal career advancement. Women need this sponsorship and the affirmation of others in leadership to “talk up” their abilities to address the business challenges and opportunity to lead.
- Include diverse women. The push for women of color is strong yet the results are not there yet. The ready women have the talent as we note on the paths of Rosalind G. Brewer currently serves as CEO of Walgreens Boots Alliance. Roz was a strong COO of Starbucks, and CEO of Sam’s Club. She has also held various leadership positions at Walmart and Kimberly-Clark. Many cited her achievements as extraordinary. Her experience track record made her great CEO candidate. Thasunda Brown Duckett, now leading TIAA, was CEO of Chase Consumer Banking, a division of JP Morgan. She is also a member of the board of directors of Nike. There are many more women of color whose experience and track record of achievement indicate readiness to serve as CEOs. Expect that diverse women CEOs will be named on public and private companies alike with the championing of boards and search firms and organizations alike. The talent is there.
- Celebrate and affirm the men who are building results. Men and current CEOs are stepping up with their support for succession planning and board slates to include women, regardless of the industry. More men are becoming champions for women and see the potential for legacy change. As more men in the C-Suite interrupt their unconscious biases, more women will get access to leadership and CEO roles earlier in their careers. WBC’s Ally of Her and Catalyst’s MARC program (Men Advocating Real Change (MARC) and other programs are making a difference. We celebrate the men who are dedicated to championing women leaders and sponsorship women CEOs forward. We recognize that men’s leadership, advocacy, and sponsorship are fundamental to women achieving gender parity in the workplace.
- Use successful women CEO role models as examples and advocates: We have many successful women CEO role models who moved into the CEO based on a career full of challenges and accomplishments. They also support other women becoming CEOs. Carol Tome served for years as CFO of Home Depot while also serving on the board of UPS. She was an obvious nomination to CEO of UPS. Jane Fraser’s career path started as a celebrated partner at McKinsey & Company, who then joined Citigroup in 2004. Within five years, Jane was named president of Citigroup, and also CEO of Consumer Banking. In September 2020, Jane was the first woman to head a major U.S. bank. She was included on Fortune‘s “Most Powerful Women in Business” list in 2014 and 2015 and has been called the “Number 1 Woman to Watch” for two consecutive years by American Banker.
- Pay equal or better compensation: Equal pay and compensation must be considered and robust across the whole pipeline. Women chief executive officers at America’s biggest companies took home median pay of more than $13 million in 2018, compared with the $12 million that men took home. That’s according to a new Equilar study, which looked at base salary, bonus, stock-based compensation and other benefits. The study found that women chief executives have made more than their male counterparts each of the last five years. During that timeframe, overall compensation has grown 25% for all CEOs surveyed. Yet, the women CEOs were an average of four years older than their male counterparts, and worked in a slightly greater number of roles, functions, companies, and industries. These CEO worked harder and longer to get to the top.
- Search firms to include women in their slates: Ask executive search firms and they will attest the requests are in for slates to include strong women CEO candidates for CEO roles. The charge is strong to the firms for both gender and diversity. Ask the firms and their work with corporate boards and CEOs alike about the call for gender and diversity. The requests are strong. Search firms are asked to advance to women on the slates as never before. Companies are contributing significant time and resources to make gender leadership a priority and get more women on a path to CEOs from the C-Suite. and the boardroom
- Join and support women’s organizations focused on position, pay and power for all women. WBC and the key organizations such as Ascend, C200 and Catalyst and many more organizations bear witness to current CEOs and Boards naming qualified women to the executive ranks. The Rockefeller Foundation as part of its “100 x25” initiative, aims to support the hiring of 100 Fortune 500 women CEOs by 2025. Great Britain has an initiative called 25by25. Egon Zehnder UK is working with clients, candidates as well as other interested partners to make 25 female Chief Executives of FTSE 100 companies by 2025 a reality.
In a decade old Forbes article, Robert Reiss, CEO of The CEO Forum Group and WBC board member, wrote, “We need to have 50 ‘Fortune 500 women CEOs. This is no longer just the right thing to do; it’s an economic issue. How can we expect financial success when we are excluding top talent from leading enterprises? I believe we will achieve 50 in 2022!” The WBC movement is building the critical mass that will ultimately lead us to elevate business, the economy and society. We are at 41 now -so we can change the numbers!
WBC supports the pipeline acceleration of high potential women business leaders taking on increasingly significant operating responsibilities that can position them as CEO contenders. (Note: More than 90% of CEO’s have had significant P&L responsibility prior to taking the CEO role)
We do so with the support of our partner organizations and a wide and diverse constituency of individual leaders who champion the need. The economic case is strong. It’s reported that companies where at least 30% of leaders are women can expect to add more than one percentage point to their net margin compared to companies with none to limited female leadership. Some companies that increased the number of female partners by 10% actually saw 9.7% more profitable return. The time is now for female CEOs!