Corporate Leadership by Gender

Those hoping for gender equality in the business world can find encouragement in the growing number of women leading large corporations. Since 2015, female representation in the C-suite has risen from 17% to 28%, alongside growth in the numbers of women occupying vice president and senior vice president roles. Despite this progress, men still constitute 72% of the C-suite. The promotion gap persists as well, with only 87 women promoted for every 100 men moving from entry level to managerial roles.

The dilemma of balancing motherhood with career aspirations is just one of the factors contributing to the greater likelihood of men climbing the corporate ladder, according to recent studies.

There's a noticeable gap in research concerning the leadership roles of transgender and nonbinary individuals within corporations. What’s more, the Harvard Business Review reports that companies are behind in identifying policies “that empower individual agency, make room for experiences outside of the gender binary, and ensure access to resources and quality of working life for people of all gender identities and expressions.” A notable exception is Martine Rothblatt, a transgender woman who leads as CEO of United Therapeutics and founded Sirius XM, and one of the highest-paid female CEOs in the United States.

Based on the data that we did identify, this report focuses on how executives identified by researchers as women are faring.

Women as CEOs

When Fortune published its list of chief executive officers (CEOs) at the 500 largest U.S. companies in 2023, the number of women represented an all-time high: 52. That beat the record from just a year before, when 37 female executives made the list. The upward trend in female leadership is certainly a reason for diversity advocates to feel optimism. Just a decade earlier, only 15 women led a Fortune 500 firm, while in 2000, the number of women on the elite list of corporate heads was just two.

Another piece of promising news: Unlike lower-ranked employees, prominent female CEOs tend to make slightly more than their male counterparts. Specifically, a study conducted for The Associated Press, which examined nearly two-thirds of Fortune 500 CEOs, found that women in these positions had an average annual compensation of $12.7 million compared to $11.2 million for men. A separate study by Equilar, focusing on CEOs within the Equilar 100 companies, reported that female CEOs received an average compensation package of $21.4 million, significantly higher than the $16.4 million average package received by male CEOs on the list.

Even so, the fact that only 10.4% of the nation’s Fortune 500 companies have a woman in charge suggests a long way to go before corporate America remotely achieves gender equality.

And while women lead a few of the country’s most iconic businesses—such as Mary Barra at General Motors, Safra Catz at Oracle, and Beth Ford at agriculture giant Land O’Lakes—there are precious few female CEOs toward the top of the Fortune list. Several are concentrated in the retail sector, including CVS's Karen Lynch, and Laura J. Alber, who leads Williams-Sonoma.

Gender Gap in the C-Suite

While the gender disparity is not quite as sharp when looking at non-CEO positions, such as chief operating officers and chief financial officers, it’s still sizable. Recent data indicates that the representation of women drops to 25% in C-suite positions on average, compared to 46% in entry-level positions.

In sectors such as Consumer Services, Retail, and Education, women hold between 64% and 68% of C-suite roles compared to their presence in entry-level jobs. On the other hand, industries like Construction, Financial Services, and Real Estate present more challenges for women aiming for leadership, where their representation in C-suite positions is less than half of their entry-level numbers. 

Women are represented in roughly the same way in America's largest boardrooms. While they make up 27% of board directors in Russell 3000 companies, only 7% serve as board chairs, and 13% as lead directors. Despite recent progress in diversity, no Fortune 500 company board completely reflects the U.S. demographic population.

Contributing Factors

Why, exactly, are women so underrepresented in corporate leadership roles? Research points to a mix of contributing factors rather than any single cause. While women comprise 47% of entry-level roles, according to the consulting firm McKinsey & Company, their ranks dwindle the higher that you look up the organizational chart. Only 38% of managers are female, and they make up just a third of senior managers and directors. Their presence falls off even more at the executive level. 

The Tug of Family Life

The challenge of balancing the demands of motherhood with career ambitions is a key reason why men often progress further up the corporate ladder than women. Studies show women are much more likely than men to cut back on work hours to care for their children. After their paid jobs, working mothers face a second shift of unpaid household chores and caregiving, ultimately spending more hours working in total than fathers.

It appears that tension has only increased during the pandemic, when many parents had young children at home instead of in school or daycare centers. McKinsey’s Women in the Workplace report found that as many as one in four women have considered downshifting their careers or leaving the workforce entirely. The authors noted that many employees, particularly parents and caregivers, are confronted with a dilemma: either fail to meet the pre-pandemic standards that might now be unattainable, or overextend themselves to maintain a pace that's not sustainable.

“I would have loved for the board to have had a woman to pick from. But at the end of the day, the board selects the CEO, and we just didn’t have any women who were ready for the job.”—Indra Nooyi, former head of PepsiCo, on being succeeded by a male CEO.

Gender Bias and Lack of Mentorship Opportunities

Experts point to a slew of other forces that are also slowing the pipeline of female talent, including gender biases that affect hiring and promotion decisions and a lack of mentorship opportunities. Because of those challenges, there are simply fewer qualified women to serve in the corporation’s highest roles. Stanford University researchers, for example, note that women comprise only 13% of the positions likely to land a CEO promotion or board membership.

Indra Nooyi, the now-retireed chief executive of PepsiCo, acknowledged that dilemma as her company sought to find her replacement. “I would have loved for the board to have had a woman to pick from,” she told The New York Times. “But at the end of the day, the board selects the CEO, and we just didn’t have any women who were ready for the job.” 

Possible Solutions

That doesn’t mean attrition among women is inevitable. For example, the authors of the McKinsey report suggest that unconscious-bias training can help corporations handle performance reviews, and therefore promotion decisions, more equitably.

There’s also evidence that businesses that help employees achieve a better work-life balance seem more successful in terms of promoting women. A Boston Consulting Group study of more than 5,000 employees found that among those working at firms where diversity was a priority, women were nearly as likely as men to seek corporate advancement. At other firms, only 66% of women thought they could climb the ladder, compared to 83% of male respondents.

The Bottom Line

Although the presence of women in corporate leadership has notably improved, achieving gender equality in the business sector still faces significant hurdles. For example, men still hold a dominant 72% of C-suite positions, and women account for only about 10% of Fortune 500 CEO roles.

Although there's been a positive shift towards greater female leadership and a rise in compensation for top-level women CEOs over the past decade, experts agree that companies need to further develop a strong talent pipeline that embraces diversity. This includes actively supporting individuals who identify as nonbinary, gender fluid, and gender nonconforming.