The Changing Face of Tech

Growth in women’s representation on boards and in C-suites at tech companies has increased worldwide in the past 10 years, but there’s still a long way to go.

This article is part of S&P Global’s #ChangePays campaign that explores the benefits of increasing the participation of women in the workforce for the capital markets and world economy. Our research about women in technology brings together experts and data throughout S&P Global's many businesses – Market Intelligence, Ratings, Indices, 451 Research, and Kensho – to bring insights to the market under the umbrella of the company's recently created Women’s Research Council. For this report, we compare and contrast our analysis of several datasets, the largest of which is a global set of about 1,280 technology companies for which we examined detailed people data for 2010 to February 2020.

Not surprisingly, women now occupy less than one-fifth of spots on the boards of directors at tech companies, and the share is lower for women executives. Both shares are less than for the financial or industrial sectors but about the same as in the energy industry, according to our 2019 study "The Changing Face of Energy."

What's encouraging are trends this decade showing strong growth on both counts. The share of female board members nearly doubled since 2010 for the technology sector on average and rose about 60% for women executives. There are meaningful regional differences, with the U.S. ahead and Asia-Pacific behind.

Assuming an optimistic exponential growth rate, technology boards would attain 50-50 gender parity in about a decade. We also assume that countries with very low rates accelerate progress, especially in Asia and particularly Japan. U.S. boards would reach parity sooner because of their faster current growth rates. However, at current growth rates, we see board parity by 2050 globally and by 2038 for the U.S.

We project that time to parity would take longer in the C-suite and throughout companies because of lower current growth rates than in the boardroom. At current growth rates, we see executive parity by 2070 globally and by 2050 for the U.S.

Looking more closely into about 90 public technology companies rated by S&P Global Ratings, the share of female employees also ranges widely and averages about 30%, with growth averaging an annual 1%-2% in 2016-2018. The share is lower, at 1 in 5, for technical positions than the general employment rate, implying that women in technology companies tend to occupy more administrative and support roles. We see higher rates of women in technical roles at innovative, higher-growth companies such as Adobe, Intel, Intuit, Google, Salesforce, and Uber.

Examining the IT departments in 550 companies worldwide, just under half of them said women accounted for less than 25% of staff, according to a survey by 451 Research. However, 9.5% reported no women, zero, in their company's IT department.

Why is gender diversity an important factor? Companies with more women in the IT department tend to be further along in digital transformation. Much more broadly, our economic modeling suggests that greater gender diversity is linked to stronger financial performance. More study is needed on this point and the other conclusions in our report, which would benefit from better people data from technology companies.

Regulation has translated into more diversity on boards, but not on other levels, which indicates there is no single solution to achieving gender parity in technology. Best-practice technology companies seem to take a holistic approach that includes attracting more women into science and engineering studies, internal programs and work-life policies, external partnerships with nongovernmental organizations, and diversity standards for suppliers. “There's an increasing appetite for seeing real change in diversity," said Erin Cummins, chief financial officer at ThoughtWorks, one of five female executives we interviewed for this article.

Part 1: More Women Find A Place In The Boardroom And C-Suites

We have found that gains by women in technology companies were most visible on boards, but less so in executive positions. Our analysis of about 1,280 technology companies across the world shows women hold on average 16.6% of board seats. For the broader technology, media, and telecommunications (TMT) sector, the share of women board members has been lower than other broad sectors such as financials and industrials in the past decade (see chart 1).

What's more, women on boards at tech companies have more than doubled their presence in the past decade, moving from just 6.8% in 2010. We noticed an uptick in growth in 2016 in the U.S., where from 2010 to 2015 growth was similar to that of other countries. Currently, the U.S. share stands at 21.5%. For the rest of the world the figure is 14.5%, the difference mostly due to the large number of tech companies in Asia with no women board members (see charts 4 and 5). As Inhi Cho Suh, general manager of global strategic partnerships at IBM, notes, “As an industry, we've progressed. But we’re still not where we need to be.”

Chart 1: Board Representation Makes Gains In Tech 

TMT growth is lower than in the financial or industrial sectors

The ratio of women executives, at 15% in 2020, has also grown rapidly, at about an average annual 1.6% or 61% over the last 10 years, from 9.1% in 2010. The U.S. showed stronger growth over the decade than the rest of the world, to 19.5% versus 11.3%. The rest of the world grew to 12% from 7.5%. Again, the U.S. growth rate accelerated, this time in 2017, compared with that of the rest of the world.

Charts 2 & 3: U.S. Tech Shows Stronger Growth In Women On Boards And In C-Suites 

It's not just in Asia where tech companies have zero women on boards. Of all of the companies in our dataset, 30% have no women board members. Although a large number of those companies are based in Asia — 62% Japanese, 75% South Korean, and 41.5% Taiwanese companies — in the U.S., 8.5% do not have women on their boards.

Chart 4: Share Of Women Board Members, By Country 

Striking geographic differences

Countries with over 30% of women board members in our dataset are mainly in Europe where several countries have regulatory minimums for boards of directors of public companies. France, Spain, Belgium, and Norway are among the countries with mandates. As a result, France averages 41% for 14 companies. Belgium is at 38% for six companies, Norway at 36% for five companies, Sweden at 34.6% for 10 companies, and Italy at 33% for eight companies. However, these countries have about half as many women executives, which indicates that regulation at the board level is not spilling over as quickly to the C-suite. South Africa also has stronger regional representation at about 31%, in part due to regulatory requirements.

The countries with the largest number of technology companies in the analysis had shares of women board members averaging 20.6% for the U.S., 5.4% for Japan, 12.6% for Taiwan, and 14.2% for China. California in September 2018 passed a law requiring publicly held companies with an executive base in the state to have at least one female board member by the end of 2019. The minimum is set to increase in 2021 depending on the size of the board. The state requirement could reverberate to other IT companies in the U.S. since a number of them are based in Silicon Valley, though it faces a legal challenge.

The lower percentages for Asian countries fit with lower rates of workforce participation, which was 44.5% in Japan in mid-2019. And then, 55% of the women at work in Japan are not in career-track jobs, according to a Nikkei Asian Review news article citing data from the country's Ministry of Internal Affairs. Taiwan shows a women’s workforce participation rate at 51.4% for 2019, according to the country's Statistical Bureau. And in China 60.6% of women are in the workforce, according to the World Bank, but only 28.4% of managers there are women, according to OECD data. Our data indicate Thailand has a higher share of women executives, which may be the result of a number of efforts by the government to support women.

Regulation at the board level has not lifted the share of women executives in the technology sector. In other words, there is currently a weak correlation between the ratio of women on boards and women executives in Europe. In France, only 16% of executives are women. The shares are 30% for Belgium, 20% for Norway, and 9% for Spain (see chart 5).

More of a presence in software than in hardware

Women in leadership positions have more of a presence in software than in hardware. The shares of women board members (17.1%) and executives (15.4%) is greater in the software and services subsector than in the technology hardware and equipment subsector (14.1% for boards and 13.5% for executives). These two subsectors account for 95% of technology companies in the study.

Looking more closely, the subsectors with the highest percentages are internet software and services subsector (19.9%) and then home entertainment software (19.6%; see chart 6). Electronics components companies have the lowest shares at 10.8% which makes sense because 74.6% of them are headquartered in China, Japan, and Taiwan, which feature lower shares of women board members.

For executives, the lowest subsector is IT consulting at 10.5%, followed by semiconductor equipment at 11.1%, and electronic components at 12.0%.

Chart 6: Share Of Women On Tech Boards And In C-Suites Varies Widely By Subsector 

Part 4: The Voice Of Tech: How Company Culture Has Changed

We interviewed five female executives in senior roles at tech companies around the world about their careers and what made a difference. They all talked about recognizing that at some point they were the only woman in the meeting, or the elevator, or the boardroom. As keys to their success, they said they didn't let being in the minority deter them, while highlighting support they received from family, mentors, and their companies as they climbed the career ladder. Here we present a summary of their remarks.

Most of the women we interviewed said they have seen improvements in gender diversity in the tech industry over the past two decades — in terms of company culture, support networks for women, and particularly family leave policies.

Inhi Cho Suh is the general manager of global strategic partnerships at IBM, where she has worked for over two decades. She described cobbling together solutions when she had her two sons years ago. “I had to rethink what it meant to be a working mom because there wasn't a script for that,” Suh said.

Now, she said, IBM has improved the infrastructure to support new moms and parents. The company increased paid family leave to 20 weeks for moms and 12 weeks for dads, partners, and adoptive parents.

“As an industry, we've progressed. But we’re still not where we need to be,” she said.

Several women we interviewed spoke about the important role support networks played in their careers — in the form of mentors, sponsors, coaches, and role models.

Erin Cummins relied on this kind of support when she took on her first CFO role in 2014 at ThoughtWorks, a privately held global software consultancy — a transition she described as “overwhelming” at times.

Cummins worked with her mentor and coach on a biweekly basis for an hour at a time. The coach helped her stay clear and organized; she also helped Cummins understand that she didn’t have to be “perfect all the time.”

“My biggest piece of advice for a woman who is looking to be in a C-level role or just a senior leadership position would be to surround yourself with role models in an environment that will allow you to thrive,” she said.

Mary Gendron, chief information officer at semiconductor company Qualcomm, said she was able to focus on her career because her husband took a step back in his to become a stay-at-home dad to their three young children. “There came a crossroads where my career was taking off faster than his,” she said. “He just made way for me and supported me in my pursuits. And then I ended up going down the path of being the primary wage earner in our house and he is the primary caregiver.”

“When I was coming up through my career I had a total lack of awareness of my privilege,” she said. “Having that support and family background I kind of took it for granted and didn’t realize how important that was for me to be able to embrace these new opportunities, take risks, reach out, and change jobs or do whatever I had to do to advance in my career. And I know I underestimated those foundational elements.”

A number of executives said that company culture plays an important role in attracting and retaining women — and that culture doesn’t change overnight. Instead, as Accenture’s senior managing director of technology Emma McGuigan noted, it has to be deliberate, intentional, and methodical. McGuigan said IT consulting firm Accenture has recognized that if you want a diverse workforce, you have to build repeatable, measurable processes.

“The culture relies on a number of key pillars — like having strong role models, having leaders who will have difficult conversations, having processes that make sure that we are deliberate about looking at whether we are promoting on equal numbers,” she said. “When you’ve got specific pools of talent who are leaving, you’ve got to be deliberate and purposeful about how you’re going to engage with that group.”

Again and again, executives highlighted the importance of the pipeline — getting women in the door, and then retaining them and promoting them.

Jean Hu, CFO of semiconductor company Marvell Technology Group Ltd., called the lack of women in the pipeline “a key challenge” for the tech industry.

Marvell is focused on building that pipeline starting at the internship level. The company works with different universities and organizations trying to promote coding for young girls to encourage them to get into engineering.

“You have to go from before college, then encourage the women to study engineering, then you have a pool you can draw from. That’s the very beginning point of the whole conversation and the dialogue that we’re having with different organizations,” Hu said.

Girls begin to self-select out of STEM fields at a young age, and Accenture’s McGuigan talks passionately about changing outdated stereotypes.

“A lot of what we’re looking at in the world of STEM is hugely creative, hugely exciting,” she said. “When you start to help girls understand how they can change the world with technology and empowered by technology, then you start to change the discussion.”

From Zero To 50-50

Optimistically, assuming exponential growth, it would take a decade to achieve gender parity at the top in the tech world. And unless technology companies exponentially accelerate their efforts, it might take a couple of generations to achieve gender parity at all levels. It won't naturally become easier, especially since the technology skills shortage is only increasing. Regulation has translated to more diversity on boards, but not on other levels. This suggests there is no single solution to increase gender parity in a sector traditionally dominated by men. Best-practice tech companies indicate that what's needed are human ecosystems to provide holistic and positive support for women to learn about tech, find jobs in the sector, and have opportunities for career growth. Mary Gendron, chief information officer at Qualcomm, notes that over the past few years she has seen much greater awareness of the opportunity for improvement and a sincere desire among leadership to address the issue. Assuming linear growth, that is, at current growth rates, we see much slower progress: board parity by 2050 globally and by 2038 for the U.S., and executive parity by 2070 globally and by 2050 for the U.S.

In the U.S., 2016 appeared to be an inflection point: women started to make greater gains in in C-suites and the boardroom than in other countries around the world. Understanding why might provide clues to faster gains for women. However, that progress needs to accelerate in the U.S. and run ever faster in companies and countries with low participation by women. There's a lot at stake, including reputational risk, digital strategies, and financial performance—not to mention the potential of one-half of the people on the planet. On the other hand, diversity is found to attract talent, foster creativity and innovation, and signal good management for investors. Yet, as we have seen in this report, the link between diversity and its benefits depends on context, especially industry and country norms about inclusion. Nevertheless, we echo researchers who think that investment in gender diversity is worthwhile—or as S&P Global says #ChangePays. Indeed, this study reinforces the view that tech companies worldwide are generally becoming more supportive of women and their importance in economies. Indeed, firms that support gender diversity stand to capture the benefits earlier, leading a competitive advantage. Lastly, if companies publish more information and data about gender diversity, it could boost awareness about progress, for example with studies like these, and provide a further catalyst for change.

This article collects thought leadership research and data from five S&P Global divisions about women working in technology sector around the world. We feature contributions from S&P Global Market Intelligence and S&P Dow Jones Indices (Parts 1 and 4), S&P Global Ratings (Parts 2 and 3), and 451 Research (Diversity In The IT Department), along with contributions by Kensho. Though the contributions reflect each division’s own separate perspectives and requirements, together they reflect S&P Global’s current thinking on this important topic.