Published: March 7, 2024
Despite corporate attention paid to gender diversity in recent years, progress toward parity in senior roles remains slow. A new analysis by S&P Global Sustainable1 shows that this is true across junior management positions that feed into more senior roles. It is also true for senior management: 75.0% of these roles are still held by men.
Women hold just 29.0% of management roles with a revenue-generating function — the kind of role that can be a stepping stone to the C-suite. This data point sheds light on how the pipeline to the top narrows for women.
Progress is similarly slow in the boardroom, and the data indicates that to make it onto a board, the bar for women is high. Our analysis shows that a larger share of women in board seats have relevant industry experience compared to men on boards.
Looking at the broader workforce, we found that women hold an increasing share of science, technology, engineering or mathematics (STEM) roles in 10 of the 11 sectors analyzed. Only the energy sector saw this trend reverse in 2023. The healthcare sector has the highest share of women in STEM positions at 41.1%, followed by consumer staples, real estate and financials.
It’s become a familiar pattern: When March arrives each year, we have the same conversation around International Women’s Day and Women’s History Month — acknowledging that the number of women in corporate leadership is inching upward while gender parity in boardrooms, management teams and revenue-generating roles remains distant. This time around we ask: What’s the holdup?
Research shows that diversity is positive for business, 1 and gender diversity has been shown to make firms more competitive. In recent years, many companies have taken steps to advance gender diversity internally by offering equal opportunities for promotion, pay equity and flexible working.
Despite the evidence and the efforts, each year the data tells a similar story of slow progress in corporate leadership roles. This year, we wanted to take the discussion a step further by analyzing some of the other available data surrounding gender diversity and women in leadership.
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For International Women’s Day and Women’s History Month 2023, S&P Global conducted a series of interviews with women CEOs and leaders from across industries and around the globe. The data shows us that the number of women in top roles remains relatively low. Our goal with the Women in Leadership interview series was to understand what’s behind the numbers: How do the few women who make it to the top of their companies get there, and what challenges do they face along the way? |
Unless otherwise noted, the source of data for this analysis is the S&P Global Corporate Sustainability Assessment (CSA), an annual evaluation of companies’ sustainability practices that has been conducted since 1999. It covers thousands of companies from around the world, with a focus on sustainability criteria that are both industry-specific and financially material. Ahead of International Women’s Day 2024, we took a deep dive into where women stand in senior and junior roles, revenue-generating positions, and board membership compared with men in terms of relevant industry experience.
To determine how women are faring in top jobs, we started by examining the percentage of women in senior management positions. Analysis of more than 1,100 companies shows that women hold about one-quarter (25.1%) of senior management or leadership roles. That figure is up slightly from 24.0% in 2022 and 23.0% in 2021.
The CSA defines senior management positions as those with a reporting line at most two levels away from the CEO; this includes individuals who plan, direct, and formulate policies, set strategy, and provide the overall direction of enterprises/organizations for the development and delivery of products or services, within the parameters approved by boards of directors or other governing bodies.
The path to senior leadership often begins on the lower rungs of the management ladder. In order to increase the number of women in senior management roles, there needs to be a pipeline of talent in more junior roles. To assess the state of that pipeline, we also looked at women in junior management roles. The CSA defines these roles as first-line managers, junior managers and the lowest level of management within a company’s management hierarchy. These individuals are typically responsible for directing and executing the day-to-day operational objectives of organizations, conveying the directions of higher-level officials and managers to subordinate personnel.
The share of women in junior management positions is somewhat larger than senior management, but still far from parity with men. While the number of women in junior management roles rose slightly from 2021 to 2023, women still hold less than one-third of these positions. If junior management is the talent pool that feeds into senior leadership roles, more than two-thirds of the employees in that pool are men.
In its 2023 Women in the Workplace Report, consulting firm McKinsey & Co. identified the “broken rung” — as opposed to the “glass ceiling” — as the biggest hurdle women face on the road to senior leadership. In other words, the main challenge facing women is reaching their first step in management, as opposed to higher up the ladder. The McKinsey report found that in 2023, for every 100 men promoted from entry level to manager, 87 women were promoted.
There is a smaller share of women in senior and junior management roles, despite an increasing number of women entering higher education. For example, in the US, women now account for more than half of the college-educated workforce, but that is not yet feeding through to the number of women in management. Developing talent early on in women’s careers could eventually lead to an increase in senior management roles and in the C-suite.
There are different kinds of management roles, and some have a more direct influence on a company’s performance than others. To better understand how women are filling roles with an explicit tie to a company’s bottom line, we also analyzed the women in management roles with a revenue-generating function.
The CSA defines revenue-generating roles as line management roles in departments such as sales, or that contribute directly to the output of products or services. It excludes support functions such as human resources, information technology and legal. This revenue-generating category may also be referred to as roles that have P&L (profit and loss) responsibility.
The data shows that women hold less than one-third of these kinds of management roles. This number stood at 29.0% in 2023, up slightly from 27.6% in 2022 and 27.0% in 2021. This data point matters because revenue-generating positions or those with P&L responsibility can come with meaningful influence on a company’s strategy and decision-making. While not the sole path, these kinds of roles can be a stepping stone to the C-suite as they can provide experience in running businesses or making operational decisions.
Stereotypical views about gender roles can regard dealmaking and negotiating as traits associated with men. This can penalize women, who have historically faced societal expectations to fill more nurturing roles. Women who do not conform to these stereotypes can face criticism for failing to meet societal expectations, while women who do conform may be perceived as not possessing the characteristics needed to lead effectively.
To escape this catch-22, it is important to challenge narrow, gender-stereotyped roles and broaden the perception of what constitutes strong leadership. S&P Global has conducted research on CEO communication styles and found significant differences between how men and women in the top role communicate, but no significant difference in company performance between men and women CEOs. In other words: Part of the solution to increasing the number of women in leadership roles is recognizing there are diverse ways to lead successfully.
We also wanted to understand how board composition is changing. The analysis examined the number of women on boards and how that has changed over time. As shown in the first chart, we found a similar trend as in management roles: Women hold about one-quarter (24.9%) of board positions in the universe of more than 1,100 global companies in our analysis; this number rose from 23.3% in 2022 and 21.0% in 2021. This was despite shareholder pressure for more gender diverse boards, companies setting quotas for a minimum number of women board members, and some geographies’ mandatory quotas for women on boards.
A lack of women CEOs and in senior management could explain why there is a small percentage of women on boards compared to men. A report distributed by the Organisation for Economic Co-operation and Development suggested that companies with a female CEO may have a wider pool of boardroom candidates and that company culture “might be more amenable to female leadership in general.”
To take the analysis a step further, we also analyzed the relevant industry experience of board directors. In discussions about gender diversity, one reason we sometimes hear to explain the lack of women in leadership is the difficulty of finding women with relevant backgrounds to fill these roles.
S&P Global data challenges that argument. Our analysis finds that while there are far fewer women in board roles than men, a higher percentage of women board directors than men have relevant industry experience. This was true for 16 of the 25 industry groups in our analysis, including: software & services; banks; energy; semiconductors & semiconductor equipment; insurance; financial services; health care equipment & services; and pharmaceuticals, biotechnology & life sciences.
The CSA defines relevant experience as practical work experience at another company in the same industry (based on the GICS level 1 industry classification system). This experience can be attained in employee or executive roles and can be acquired by way of functions in management, academia, consulting, or research. Sitting on another company's board in the same industry does not qualify as relevant experience. One interpretation of this finding is that the bar is higher for women to achieve the same career results as men: They need to show up with more experience to get a foot in the door.
There is research that supports this thesis. For example, a previous natural language processing analysis by S&P Global demonstrated that the achievements, education, or personal traits associated with success occur more often within the biographies of women compared to men — suggesting that the contingent of men in that analysis was relatively "overfished" compared to the contingent of women as a direct result of a bias preventing women from C-suite appointments.
The preceding data helps paint a picture of the women in leadership roles — both on the board and in management. We find incremental progress and continued gender disparities that do not appear to be explained by a lack of relevant industry experience. But what does our data tell us about the broader corporate workforce?
In 10 of the 11 sectors we analyzed, we found that women hold an increasing share of science, technology, engineering or mathematics (STEM) roles. The CSA defines STEM workers as those who use their knowledge of science, technology, engineering or mathematics in their daily responsibilities. To be classified as a STEM employee, the employee should have a STEM-related qualification and make use of these skills in their operational position. Positions include, but are not limited to, computer programmer, web developer, statistician, logistician, engineer, physicist, and scientist.
The healthcare sector has the highest share of women in STEM positions at 41.1%, followed by consumer staples (36.1%), real estate (32.5%) and financials (31.1%).
Energy is the only sector in our analysis where we saw a decrease in the share of STEM-related roles held by women. Women held 20.8% of these energy positions in 2021 and 2022, and this slipped to 20.0% in 2023.
A STEM background could be fundamental in increasing the number of women in management and C-suite roles. Research into CEO backgrounds published by S&P Global in January 2024 found that: “In sectors such as energy, automotive and health care, women CEOs are more likely to have a STEM educational background compared to their peers who are men — suggesting a STEM background may be more important for women in these industries.”
Many of the reasons offered to explain the barriers to progress for women in leadership suggest a perilous path — everything from broken rungs to glass ceilings to glass cliffs. And indeed, we’ve heard from women leaders through our interviews that being a woman in the workforce and rising through the management ranks can sometimes feel like walking on a tightrope.
Our analysis shows that the number of women in management continues to climb, but only slowly. Parity remains distant, and men comprise more than two-thirds of the junior management ranks, with clear implications for the pipeline of senior management candidates. The smaller share of women in revenue-generating roles that help provide access to the C-suite is also narrowing the pipeline.
We also find that women in our study universe hold only one-quarter of board seats. Significantly, our data shows that these women are more likely to have relevant industry experience compared to men on boards — challenging the narrative that the gender disparity is due to a lack of women with relevant background experience. As we expand our view to the broader workforce, one encouraging finding is that women are taking on an increasing share of STEM-related positions. This finding could be interpreted as a step in the right direction — away from the kinds of cultural and institutional gender biases that dictate what kinds of roles men hold and what roles are suitable for women.
There is no simple answer to the question we posed at the start of this paper. We will continue to use the available data to explore this question in research, coupled with interviews with industry leaders, academics and women in the workforce, to understand the holdup in getting more women to leadership roles.
[1]The Key to Unlocking U.S. GDP Growth: Women, S&P Global, October 2018; When Women Lead, Firms Win, S&P Global, October 2019; How the Advancement of Black Women Will Build a Better Economy for All, S&P Global, June 2021.
