How have the women business leaders of today made it to the top?
Forbes’ Most Powerful Women list, released every year, covers women in leadership positions in politics, government, finance, business and philanthropy.
It is compiled using four metrics: money (GDP, revenue, assets under management, or net worth), media mentions, impact (employee count/population) and spheres of influence.
Of this year’s top 100 women, 45 are chief executives of major companies.
This population can give us some clues: 24 per cent of the top 45 female chief executives found the best way to lead a company was to start one.
This is disproportionately the case in Asia, where five out of nine women are leading companies they founded.
Of the remainder, 20 per cent were perhaps born to lead; in any event they now run their family businesses.
- Women in leadership roles are found in investment and technology companies
- Mentoring is important, as are non-executive director roles
- The ‘glass cliff’ phenomenon exists, but women have risen to the challenge
While this does not sound like the most progressive statistic, perhaps it is a form of progress that fathers are now as likely to consider their daughters as their sons to succeed them.
Women are most likely to be found leading the largest investment, technology or consumer financial services companies.
However, it is a fallacy to think that women are strongly represented at the head of other consumer businesses, in spite of the fact that around 50 per cent of consumers tend to be female.
While four women lead energy/mining companies and three lead major aerospace/defence companies, none of the 45 lead retail or consumer goods businesses, for example.
The UK boasts Emma Walmsley (pictured), chief executive of GSK, who is the only woman to lead a major global pharmaceutical business and is the sole Brit running a UK-headquartered company featured in the list.
Including Ms Walmsley, there are now six female chief executives in the FTSE 100; this is fewer than there are men called David.
For this to change any time soon, the proportion of women being appointed to executive committee roles – the key launchpad for chief executive successors – needs to increase.
The November 2019 Hampton Alexander Review found these committees are 23 per cent female, with women comprising 32 per cent of newcomers in the previous year.
For the UK’s target of 33 per cent female executive committee membership to be reached in 2020, this appointment rate would need to shift dramatically, to nearly 50 per cent. Despite the best efforts of UK businesses, this is a stretch.
However, after 10 intensive years of focus following on from the Davies Review, we do at least now know where the crampons are that can provide the fastest route up the organisational ‘glass pyramid’ – where there are too many women at the bottom and too few at the top.
To aid the progression to more senior roles, formal sponsorship programmes in which a senior colleague provides developmental opportunities, including those above an individual’s current level, and builds the case for promotion, are important.
These opportunities tend to have been available informally for men with other men, but not for their female colleagues.
Formal company mandated programmes overcome this.
Mentorship, in which individuals who are considerably more senior and who may well be outside the mentee’s own network provide support, is also key.
In the UK, the FTSE 100 Cross-Company Mentoring programme, which was established by Peninah Thompson in 2003, has achieved remarkable results.
The scheme asked FTSE 100 chairmen to mentor a senior woman from another company, and in return to nominate the most senior woman they could find in their own company to receive mentorship.
Of the approximately 250 mentees since 2003, 48 have joined FTSE 100 boards or executive committees as executive directors or members, and 69 have become non-executive directors of FTSE 100 companies.
Gaining these non-executive director appointments occurred partly as a result of the expert mentoring the women received, but it wasalso a function of them becoming networked with a group of chairmen who could vouch for them and provide references on them.
This network effect reduced any perceived risk in an individual whose background and experiences, as well astheir gender, might makethem a non-traditional board appointment.
There is no question that for aspiring female FTSE 100 chief executives, the most powerful career accelerator is take on a non-executive director role at the right time.
Of the current six, five gained non-executive director experience elsewhere before being promoted to the top job.
Gaining this board experience is a powerful equity card.
Many women in contention for chief executive roles in the near term may be at a stage of life when they also have extensive family responsibilities and partners who are also striving towards a breakthrough point in their own careers.
The range of experience gained in eight to 10 annual board and committee meetings as a non-executive director is a more efficient and pragmatic means for them to receive development than most other forms of executive education.
Of the current ‘FTSE six’, three chief executives came from outside the companies they lead, and three were internal appointments, which underlines the importance of the internal route to the top.
There are a number of things that companies need to do to maximise their chances of being able to appoint an internal successor to the chief executive.
The FTSE 100 companies that undertake chief executive succession planning do so over multiple years, not months.
Boards must be very clear on the specification for the future chief executive’s role – which will be shaped by the company’s future strategy and may be quite different from the specification for the current chief executive’s role – two to three years in advance of the event.
Internal candidates can then be assessed, gaps identified, and development plans put in place to address them with enough time for the high-potential successor to gain experience.
One other barrier to the appointment of more female chief executives may prove harder to overcome: the attractiveness of the position.
Any FTSE chief executive role is high profile and subject to media scrutiny.
This tends to be multiplied by a quantum when the subject in question is a working woman.
Evidence also exists for the ‘glass cliff’ phenomenon, whereby women are likelier than men to be appointed to leadership roles during periods of crisis, just when the chance of failure is highest.
But at the very moment when the risk is highest, the reward can also peak.
Mary Barra, chief executive of General Motors, was appointed in 2014 when the company was teetering. But, she transformed the business and is the highest-ranked chief executive in this year’s Forbes list.
It seems some women, even if they are not called David, are pretty good at climbing.