The Rise of Female Board Members: The Status Quo
Despite the increased number of women on corporate boards, it appears companies are not making the necessary changes to cultivate more female leadership. While the make-up of the Fortune-500 companies are becoming more diverse, many questions remain as to whether the composition of boards will have any impact on corporate culture.
Over the last decade, the rise in female board membership has been substantial. As of 2023, it is estimated women will fill fifty percent of Fortune 500 board appointments. (Cassida Hogg, Heidrick & Struggles). Forty percent of the 462 board seats filled last year went to women, and currently, women account for 22.5 percent of all board members in Fortune 500 companies. Id. Many have praised companies’ more female centric direction, but significant skepticism remains as the changes don’t directly address companies’ culture.
Despite women being more likely to complete both college and graduate degrees compared to men, there is still a large gap between men and women in leadership roles in the workplace (Pew Research Center), and over the last five years, the number of women in leadership roles has stagnated. (Zenger and Folkman, Harvard Business Review). Research indicates that despite woman being perceived to be more skillful than their male counterparts, they are less likely to apply for higher leadership roles. Id. Many, like Susan Gellatly, founder of Bench Strength Coaching, believe companies need to and are creating a more female-centric culture to bolster female leadership. (Gellatly, Forbes). However, others like MGM Resorts CEO, James Murren, believe companies are doing nothing, stating, “Investors don’t care enough. They may talk about wanting companies with a social conscience, but they’re really looking for companies that are going to make them a lot of money.” (Jeff Green, Bloomberg). Even Diane von Furstenberg, prominent fashion designer, stated, “Female executives are still treated as tokens on boards and in leadership.” Id.
In many cases, women in board positions don't have any power to change the dynamics of their companies. At least three female board members are needed to have any significant power to change their companies and although women are gaining more roles, companies are reluctant to hire enough women to cause any significant change to the company. Archer, Business Insider). In many cases, women are replacing other female board members and companies, who are expanding their boards to add more female representation, maintain the same ratio of women to men. (Jeff Green, Bloomberg).
Even government regulation, like California’s Senate Bill 826, which mandates public companies headquartered in the state to place at least one woman on their boards, does not rectify deep-rooted problems in company culture. (Lyla Qureshi, Equilar, Inc.). Sheryl Sandberg, Facebook’s chief operating officer, addressed quotas stating, “While they work in some cases, we can’t rely on quotas because they’re not moving the things which they're not applied to."(McGregor, The Washington Post). Sandberg believes companies and society need to address the implicit bias against women, rather than placing quotas. Id. She believeswomen’s role in the workplace will not be significant until these changes take place. Id.
The rise of the #MeToo movement, which compelled companies to confront their sexual harassment culture, has had a negative impact on women’s ability to get leadership roles. (Richard Levick, Forbes). Although, companies made changes to their male-dominated structure by appointing female board members, male leaders are less reluctant to mentor women. Id. Laura Liswood, secretary general of the Council of Women World Leaders, says, “the #MeToo movement has become a risk-management issue for men and more than half of male managers in an online survey conducted by Lean In and SurveyMonkey, found men were uncomfortable to work with women.” (Bennhold, The New York Times). This is a serious problem as women must be sponsored by leaders for promotions and leaders are predominantly men.Id. This could lead to serious ramifications because at present, women do not have the necessary numbers to change their companies’ culture and may not be able to obtain it in the future. (McGregor, The Washington Post).
The percentage of women on corporate boards is expected to increase. Although women are gaining these prestigious positions, many questions remain on whether these changes will impact companies’ culture. Women are not gaining the necessary numbers in leadership positions to create change within their companies’, and the lack of change will lead to the status quo if men continue to be uncomfortable working with women.