Mind the Gap: The Female CEO
Although I’m not a fan of trickle-down economic theory I’ve always believed that when women advance into positions of authority in the work world – pay and other conditions for women at those same companies (and in those job sectors) should eventually improve. Of course what we should strive for is equal opportunity for all members of society, women, people of color, so that each of us can achieve whatever we are capable of doing in light of our abilities, interests and willingness to do the work required to achieve our goals. Unless people like us (whatever us might look like in your instance) ascend into the ranks of middle and upper management in sufficient numbers, we can’t achieve a level playing field (to use an all too tired yet appropriate phrase).
Earlier this fall a study by Professors Phillip Cohen and Matt Huffman“Working for the Woman? Female Managers and the Gender Wage Gap” examined whether having women in managerial positions serves to reduce gender inequality in wages for lower level female employees in those businesses. Cohen and Huffman examined the U.S. Census data collected in 2002 from 79 metropolitan labor markets across 155 industries. The records of approximately 1.32 million workers were examined to test their hypothesis. Their finding: yep, it makes a difference. The consequence of women breaking the glass ceiling and reaching upper-echelons of management does lift all boats. In the industries and labor markets they studied, the wage gap between men and women’s earnings declined when women were in high enough managerial positions where they can influence policy. Having a woman boss with a say about pay, promotions, and work schedules is good for the women at all levels. Cohen and Huffman’s report is a welcome addition to earlier research findings discussed in their survey of the literature on the effects of women in the workplace. For example:
* California state agencies with more female managers in the 60s and 70s had less gender segregation than similar agencies: in other words women had access to a wider range of jobs within those organizations
* Savings and loans with women in management were likelier to hire other women into management positions
* Prime time television shows with female producers, executive producers and writers have a higher percentage of female characters
No question that having women at the top is important to the fair treatment of all women workers so I took a quick look at the Fortune 500 companies to see how women were faring. Glaciers are moving faster than women’s movement into the corner office. Thirteen women are at the helm of the Fortune 500 in 2007 -- an increase of two from 2006. Only one woman, the CEO of WellPoint (the country’s largest health insurance outfit), runs a Fortune 50 enterprise. The rest of the women CEOs are distributed among the full range of business enterprises – Reynolds American (cigarettes not aluminum) Sara Lee, ebay, Avon and Xerox to name a few. The increase is positive movement although at such small numbers (2.6% of the Fortune 500 CEO’s) hell may freeze over before we see any critical mass of women. Oh well, every bit helps. Women are doing better at the board of director level holding 16.3% of the Fortune 500 board members seats; this however is a slight decline from the previous year.
Which made me wonder . . . how well compensated are women CEOs relative to their male counterparts? The CEO of Xerox was the woman with the highest compensation $7,280,000 in the Forbes CEO Compensation Report (May 2007). She ranked 225th. Compensation for the remaining women CEOs ranged from a $1.5 million low to the second highest at $5.12 million. These salaries are downright puny. The average annual compensation for a Fortune 500 CEO was $10.8 million according to the Institute for Policy Studies.
Also of note in Forbes CEO Compensation report was that four of the eight corporations with the highest paid CEOs (compensation between $115 million to $646 million) had no women -- ZERO – on their boards of directors. The remaining four of the top eight had a total of five women directors. By contrast all the corporations with a female CEO have women on their boards of directors. In fact 45% of Sara Lee’s board members are women. And five other companies headed by women have board of directors where at least 30% of the seats are held by women. Ah that critical mass does make a difference. A friend of mine who’s been a law professor for over thirty years said he noticed a big change in the role women assumed in law schools when they reached 30%. Women participated more in class, they took leadership positions in organizations and journals and they began to thrive. Today women are half the law students in this country, and although we have made enormous inroads in the profession we have not yet achieved that magical 30% in positions of leadership within law firms and corporate law departments.
My organization’s work has been representing poor and working class women (many of them racial/ethnic minorities) who face discriminatory work conditions at places like Wal-Mart and ATT to name two defendants in pending litigation. Our clients are relegated to the lowest paid jobs with the least opportunity for advancement. They are all too often stuck to the dirt floor and a long way from the glass ceiling. In this blog I’ve focused on the glass ceiling because what happens to women at the top affects women at all levels. More women on Boards of Directors will lead to the hiring of more women CEOs and senior managers. And their presence and leadership will eventually affect women in middle management and those with line jobs too. Imagine a boss that understands that being a mother doesn’t mean you aren’t dedicated to your job or interested in advancing your career. Imagine a boss who questions whether subtle yet persistent stereotyping might be keeping talented workers from contributing more fully. Imagine a boss who allows his or her employees to work flexible hours to care for an ailing parent. Providing women fair and equal opportunity benefits not just women; it benefits all workers and our children and the broader communities in which we live.
As first published on the Huffington Post in its weekly blog, A Peaceful Revolution, about work/life satisfaction done in collaboration with MomsRising.org . Read a blog by a leading thinker in the field every Tuesday.