Gender parity: the pipeline problem

The race is on to get more women into top positions. Today, there are only seven female CEOs running FTSE 100 companies, and at the top of FTSE 350 companies, none.

The term ‘glass ceiling’ was coined more than 30 years ago. The idea is that the barriers become higher the higher you go up the organisation. But work from Isabel Fernandez-Mateo, Associate Professor of Strategy and Entrepreneurship at London Business School, shows the glass ceiling starts much earlier in the chain.

“Top management is still a man’s business with women accounting for less than 16.9% of top executives and directors in Fortune 500 firms, and only 5.2% of CEOs, despite representing 40% of the workforce,” says Dr Fernandez-Mateo.

There are many popular interventions discussed to help bridge the gender gap including financial incentives, laws, policies, regulations and quotas. But board quotas are often seen as a short-term measure. For that reason, Dr Fernandez-Mateo says time is better spent focussed on the underlying problem.

Why are there so few women at the top?

Dr Fernandez-Mateo has researched the issues of gender inequality in the labour market for many years – particularly on the role of labour-market intermediaries. Her search for barriers to women securing top positions led her to examine placement and temporary help agencies – specifically, issues of matching people to jobs and whether agencies show gender bias.

“When the media talks about why there are so few women at the top, immediately they turn to search firms and why they should provide female-only shortlists. They talk as if search firms are the ones keeping women out of the best jobs,” she says.

Based on five years of data from one executive search firm, Dr Fernandez-Mateo discovered that when it comes to search firms hiring C-suite level women, inequality occurs much earlier in the chain. 

With Roberto Fernandez, a professor at the MIT Sloan School of Management, she analysed how the search firm selects candidates for top management jobs.

“We found that the executive search firm was slightly less likely to interview women, but the bottom line is that when women have made it to C-suite level they are not less likely than men to get the jobs on offer. Most of the action happens way before. Trying to solve the problem by attacking it from the top is not very helpful; it should be done much earlier if you want to make a difference,” she says.

The traditional view of the glass ceiling is that women cannot get beyond a certain level and are likely to experience more barriers at the top than they would below. But Dr Fernandez-Mateo’s research suggests this view is too simple. 

“It’s important to remember that although women at the top may be fairly recruited, there are not many women at that level to begin with,” she says.

Questions worth asking

Now that the critical rung of the ladder has been called into question, to solve the problem, academics, policy-makers and business influencers need ensure they ask the right questions, including: 

• Who’s doing the hiring?

In her research, Dr Fernandez-Mateo found that when executive search firms hired – rather than firms hiring directly – the number of women appointed almost doubled. 

• Who’s being promoted?

What if women aren’t promoted once hired?

Dr Fernandez-Mateo found that while the search firm placed 12.5% of women in jobs, companies hiring externally placed 6.7% of women in jobs, but when companies were hiring internally (e.g. through promotion) they hired no women at all.  

• How are people being promoted?

Dr Fernandez-Mateo’s findings suggest that the way companies promote people – women in particular – needs addressing. 

The way forward

Dr Fernandez-Mateo calls for more transparency in promotion processes. “There is a lot going on in firms that we just don’t know much about,” she says. “I would like to know more about how jobs are filled and why women are dropping out if they are. I think the trouble is we don’t have good enough evidence to know exactly where the problem is so I find it very difficult to come up with a solution beyond wanting to know what’s really going on.”

If the pipeline effect is, at least, part of the problem, board quotas alone will not solve it. Rather, we need policies to move more women up the corporate ladder. But “unless we know where to look, we’re just guessing”.