The analysis focused specifically on the gender of the people in these positions, their functions and the source of their appointments, whether they came from inside or outside the organization.

Studying the composition of top management, often referred to as the C-Suite, is particularly important since it allows us to see how many women make it to the position of CEO in an organization.

Respectively Dean of the John Molson School of Business, and an expert for several decades on the place of women in the upper echelons of the business world, we will discuss the main findings of the Spencer Stuart study.

Starting points

Three conclusions in particular caught our attention:

• Men represent 60 per cent of the select group that constitutes top management. Men principally occupy the positions that offer the greatest potential for appointment as CEO, according to the history of appointments to such positions. These include, for example, Chief Operating Officer, Head of Division and Chief Financial Officer;
• Although women are increasingly present in top management positions (40 per cent), they are still found in the positions of Head of Human Resources, Head of Communications, Head of Diversity and Inclusion and Head of Sustainable Development. In other words, women are in so-called support functions that, while important for organizations, are unfortunately perceived as having little impact on shareholder equity and financial performance;
• Appointments to top management positions that lead to the position of CEO come mainly from within the company. What does this mean? That an intimate knowledge of the organization gained over a long period is valued and that there is generally a promotion process in place to feed the succession pool.

Global overview of the situation

Our experience over the last few decades allows us to draw similar conclusions about Canada. So we wanted to check whether this situation was similar in other countries.

A report by the International Labour Organization called “The Business Case for Change” provides an overview of the position of women in the upper echelons of power in 13,000 companies operating on every continent.

As in the United States and Canada, the gender divide between positions that could be called support jobs, and those that contribute directly to an organization’s profitability, appears to be widespread. According to the authors of this study, it is also referred to as a “glass wall,” since it limits the pool of potential female candidates for the position of CEO.

But how can this phenomenon be explained?

Stereotypes, biases and prejudices

First of all, gender stereotypes and prejudices come into play from childhood.

They have an impact on the toys children play with, the subjects they study, their lives and their future careers.

Girls — generally speaking — aspire to become doctors, teachers, nurses, psychologists and veterinary surgeons. As for boys, they want to become engineers and work in IT and mechanical fields.

Organizational culture

Secondly, organizational culture is a mirror of our society and its traditions.

It therefore conveys biases regarding the leadership potential of women compared to men.

According to the International Labour Organization survey cited above, 91 per cent of the women questioned agreed or strongly agreed that women lead as effectively as men. However, only 77 per cent of men agreed with this statement.

Arguably, this leadership bias has an impact on the recruitment, appointment, talent development and “stretch assignment” processes that pave the way for career progression.

There is also reason to believe that these biases are equally present on boards of directors, which are responsible for appointing CEOs and which are still predominantly composed of men.

Different life goals

Finally, women and men have different preferences and career goals.

According to a study by Harvard Business School professors Francesca Gino and Alison Wood Brooks entitled “Explaining the Gender Differences at the Top,” women are just as interested in opportunities for advancement as men are. However, they find them less attainable because of their busy schedules. As a result, women have to more seriously take into account the compromises and sacrifices they will have to make to occupy positions of high responsibility and power.

The authors are careful to point out that these results do not mean that women are less ambitious, but that career success means different things to different people. For some, it takes the form of power. For others, it can mean making colleagues happy and helping to make the world a better place in a collaborative and supportive environment.

This research is in line with that of Viviane de Beaufort, a professor at the École supérieure des sciences économiques et commerciales (ESSEC). In a survey of the career aspirations of 295 French women managers, she found that women do want to rise to the highest positions. But not at any price.

What determines career paths?

This article therefore raises the following question:

Can we, as women, one day hope to be CEOs or fulfill our professional dreams despite the biases, prejudices, stereotypes and barriers we have to overcome?

Simone de Beauvoir wrote in 1949 in her essay “The Second Sex”:

Women determine and differentiate themselves in relation to men, not men in relation to women: they are inessential in relation to what is essential. He is the subject, he is the absolute, she is the other.

This excerpt reminds us that the skills and knowledge required to perform strategic functions have always been defined in terms of the male exercise of power in an environment where the organization’s performance is judged almost exclusively by financial success and growth of shareholder value.

It’s time to think about new career paths and skills that are not defined by gender, but rather, by an organization’s mission and objectives. These goals must take into account how they contribute to creating a better world, as much as ensuring the financial success of organizations.

Functional skills must be valued as much as softer skills such as emotional intelligence, empathy, a sense of community and boldness.

Breaking down glass walls also means that organizations and their boards have a responsibility to identify and encourage women to take up positions where they can gain experience and develop their leadership skills in front line rather than support roles.

In such a context, women, as much as men, will have a better chance of reaching the highest positions in a company while remaining true to themselves — and doing so on equal terms.

Louise Champoux-Paillé is cadre en exercice at the John Molson School of Business, Concordia University. Anne-Marie Croteau is Dean at the John Molson School of Business, Concordia University.

This article was first published by The Conversation. Read the original story here. 

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 “Our core customer that’s bringing in the innovation, that’s adopting the new products, that’s buying our stuff and feeding it to their families or telling their friends about it, it’s a woman,” says Stamberger, pointing to studies that show women drive up to 80% of consumer purchases. 

The CEO with two decades of experience in the snack industry launched Planting Hope in 2020, banking on the growing popularity of plant-based products. A year later the company went public and it broke into the booming alternative milk sector with its Hope and Sesame line of milks and creamers. It was soon awarded the title of Best Novel Creamer of 2022 by Good Housekeeping. 

Stamberger says she was drawn to sesame seeds as a source for plant-based milk when she spotted a gap in the market – a lack of products that brought together both nutrition and sustainability. “Almond milk is effectively flavoured water,” she says. She notes that while dairy milk “has its issues,” including allergen concerns and sustainability and animal welfare challenges, it’s nonetheless “extraordinarily nutritious – and [when consumers] replace it with almond milk … they lose that nutrition.”

In an effort to seek out something new and innovative that could fill that gap, Stamberger and her team landed on sesame milk. According to the Hope and Sesame website, its sesame milk contains close to the same amount of protein as dairy, eight times more protein than most almond milks and two to three times more protein than most oat milks. And Hope and Sesame’s unsweetened product contains zero grams of sugar compared to 12 grams in cow’s milk. 

While there are a few sesame milks already available in Asia, Hope and Sesame is the only brand currently being sold to scale in North America. Stamberger says the sustainable, unsweetened, shelf-stable product is ready to take on its biggest competitors. 

Though oat milk has become increasingly popular among North American consumers, almond milk remains the top seller in the U.S., despite the enormous amounts of water needed to produce it. For Stamberger, growing concerns over the sustainability of almond farming created an opportunity. Sesame milk requires 95% less water to be produced than almond milk and 75% less water than oat milk, according to a 2019 report by ProVeg International. (The company plans to quantify the sustainability impact of its Hope and Sesame products by partnering with Planet FWD this year to conduct a life-cycle analysis.)

Sesame seeds are grown in a variety of arid regions around the world, including South America and Sub-Saharan Africa, where most of Hope and Sesame’s seeds come from. Sourcing its base product from tens of thousands of kilometres away may put Hope and Sesame’s carbon footprint at a disadvantage compared to other plant-based milk producers that are able to source ingredients such as oats more locally. However, sesame seeds come with other sustainability advantages, including being considered naturally pest- and drought-resistant, as well as being a soil-enhancing cover crop. 

Stamberger notes that the company’s supplier has not been able to identify a valid fair-trade certification for sesame, a crop, she adds, that “stunningly doesn’t even have an industry association.” But, she explains, “our sesame ingredient supplier has established comprehensive fair labour practices for themselves and their agricultural product providers.”

Although people have grown sesame seeds for at least 4,000 years, Stamberger calls it an “overlooked crop” in the plant-based milk space. She says that’s likely because working with the seed is difficult. “It took five years of research and development and seven figures of investment to get to a commercially viable product,” she says, noting that nailing down an extraction method that can boost the product’s shelf stability is one of the greatest challenges.

Sesame oil has long been the main commercial output for the seed, Stamberger explains, leaving the pulp or cake to be thrown away or used as animal feed. Today, Hope and Sesame uses that by-product to make milk, becoming the “first plant milk worldwide to earn the Upcycled Certified™ mark,” according to a statement released earlier this month. 

David Julian McClements, a professor of food science at the University of Massachusetts, says it is critical for plant-based milk products to be both healthy and sustainable. “There are appreciable differences in the healthiness and sustainability profiles of different plant-based milk products … sesame milk has a higher protein content than other types of plant-based milks, which would be an advantage.” 

Our core customer that’s bringing in the innovation, that’s adopting the new products, that’s buying our stuff and feeding it to their families or telling their friends about it, it’s a woman.

Julia Stamberger, CEO of the Planting Hope Company

Sesame seeds are also a natural source of calcium, providing four times as much as soy and three and a half times as much as almonds. Hope and Sesame contains both natural and fortified calcium, coming in at 390 milligrams of calcium per cup for its regular products, which should give it a leg up in a market looking for calcium-rich products. Dairy milk contains around 300 milligrams of calcium per cup. 

Stamberger notes that an additional two years of development went into ensuring Hope and Sesame’s Barista Blend could stand up to high-acid coffees and varying temperatures. “It can still do what it’s supposed to do in terms of frothing, foaming, steaming and combining without curdling.” 

Sydney Olson, a food and drink analyst for market research firm Mintel, explains that while none of the major non-dairy types currently perform as well as dairy milk “in important purchase-driving perceptions related to taste, health and cooking/additive usage,” the “other non-dairy milk” segment, which includes sesame, hemp and macadamia, was, along with oat, the only segment to see sales growth in 2022. 

“This suggests that a portion of consumers are still on the search for a base type that checks all the boxes,” she says. “If sesame milk can prove superiority to existing offerings in taste, nutrition and sustainability, and do so at a lower price, the base type certainly has potential to be a strong player.” 

Noah Hyams, the founder of Vegpreneur, forecasts that there is room for sesame milk in the brimming plant milk market. “While the sale of almond milk is still leading in the U.S., the rise in popularity of oat milk is paving the way for even more plant milks to go mainstream,” he explains. “Since the data shows us that most U.S. households buy two or more types of non-dairy milk, it’s not too far out to believe that new plant milks, such as sesame milk, might carve out a significant niche for themselves in customers’ hearts and shopping carts.”

While Planting Hope Co. does not currently report sales broken down by product line, Stamberger notes that “thus far, sales and distribution are meeting/exceeding expectations” since the sesame products were launched in the second quarter of 2022. 

Stamberger’s hope is that “once a household adopts them, they’re on the core shopping list forever.” 

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The mayors of the top three cities in this year’s Sustainable Cities Index – Stockholm, Oslo and Copenhagen – are all women, but the trend is not unique to famously progressive Scandinavia; from Bogotá to Mexico City to Accra to Tokyo, female mayors around the world are distinguishing themselves as climate leaders. Indeed, 50% of the top 10 cities in the index are led by women. C40, the network of cities founded in 2005 by then London mayor Ken Livingstone to collectively promote climate action, has spawned a subgroup of female mayors. In 2014, they numbered four; three years later, they were 15, and their number continues to grow.

There’s no single explanation for this swell in female municipal leadership, and it’s risky to attribute certain qualities or strengths to women as a whole. Calgary Mayor Jyoti Gondek points out that while men are typically judged on their ability to deliver business results, women are expected to be caring and nurturing advocates for the weak and vulnerable, and for Mother Earth. To rise through the ranks in municipal politics, women have to prove their mettle in all areas, or, as Paris Mayor Anne Hidalgo has put it, “work 10 times harder than men.”

If any generalization can be made, then, it would be that by the time women land in the mayoral seat, they’ve learned how to fight. “You have to be unafraid,” says Gondek, whose first act upon being elected mayor of Canada’s oil and gas capital last November was to declare a climate emergency. Gondek felt the public statement was vital to Calgary’s future prosperity, framing it not in opposition to the oil and gas industry, but in keeping with a “transition and transformation” that has long since been underway but not yet become part of her city’s narrative.

It was a bold move for Calgary’s first female mayor, but this is something “first female mayors” are known for. When she was first elected in 2014, Hidalgo immediately and unabashedly tried to rid Paris’s centre of most cars, which she blamed for many of the city’s ills: air pollution, loud traffic and greenhouse gas emissions. In a highly symbolic move, she had the highway that ran along the left bank of the Seine converted into 4.5 hectares of pedestrian-only greenspace. She also announced a ban on all diesel cars by 2024 and petrol cars by 2030, while vowing to make Paris a cyclist’s dream by creating an additional 1,000 kilometres of permanent bike lanes and removing 72% of existing parking spots.

The moves provoked fierce opposition – and an unsuccessful legal challenge – from conservative and motorist groups. In a 2019 interview, Hidalgo attributed the “violence” of the reaction in part to her gender. “Being a woman that wants to reduce the number of cars meant that I upset lots of men,” she said, adding that two-thirds of public transport users are women.

To rise through the ranks in municipal politics, women have to prove their mettle in all areas, or, as Paris Mayor Anne Hidalgo has put it, “work 10 times harder than men.”

But the benefits of Hidalgo’s vision quickly became clear. Re-elected in 2020 for a second term, Hidalgo expanded the scope of her plans, packaging the ideas of Franco-Colombian systems theorist Carlos Moreno into the proposition of the “ville du quart d’heure,” or 15-minute city. Very much in the tradition of famed urbanist Jane Jacobs, the objective of this hyper-localism is to make it possible for city dwellers, wherever they live, to access the essentials of life – work, school, recreation, food, medical services – within a 15-minute walk or bike ride of their homes. The concept has quickly gained currency in cities around the world.

Following Hidalgo’s lead, Montreal Mayor Valérie Plante made the 15-minute city a central plank of her campaign for re-election last November, presenting the proximity to libraries and recreational and cultural facilities as an antidote to youth disengagement and rising gun violence. C40 has built its blueprint for post-pandemic urban recovery around the 15-minute city.

It’s a recurring theme with bold ideas; once implemented and experienced, they don’t seem so bold after all. Women mayors seem to understand this. In 2002, Annika Billström, the first female mayor of Stockholm, committed what was expected to be political suicide by proposing a congestion charge on all vehicles entering the inner city. Built on an archipelago and accessed largely by bridges, Stockholm was facing serious traffic problems, with two-thirds of workers in the downtown core commuting from the suburbs. Billström’s congestion-charge proposal was met with outrage, so she suggested that it be put to a referendum, but not before the city had tried it out. Over the course of a seven-month trial in which cars were charged roughly US$3 every time they crossed an electronic cordon into the downtown core, traffic volumes dropped by a fifth, travel times were significantly reduced, and a quarter of work commuters switched to public transit.

When the trial period ended, Stockholm reverted to its old ways, but Stockholmers viewed them differently. They realized the merits of fast roads over free roads. In the 2006 referendum, a majority voted in favour of the charge, and public support for it has only grown since then.

Three of the four mayors to succeed Billström in Stockholm have been women, and the city, which was named the European Commission’s first European Green Capital in 2010, continues to excel in its environmental and climate performance. Under Karin Wanngård, who served as mayor from 2014 to 2018, the city set itself a target of being not only carbon neutral but fossil-fuel free by 2040, five years earlier than the Swedish national goal. It also established higher standards for energy-efficient buildings than in the rest of the country.

Like many mayors, Wanngård understood the importance of the role model. Using her bike to get around in all seasons and proudly displaying her preference for second-hand clothes, she presented sustainability as an opportunity rather than an exercise in enforced belt-cinching. This can-do attitude is critical, as is the determination to use cities to demonstrate to other levels of government what is possible.

The Swedish capital has a tradition of collaborating formally with the private sector to achieve its goals. Established in 2007, the Stockholm Climate Pact is a network of businesses and organizations that work with the city’s leadership to develop and implement climate strategies. Anna König Jerlmyr, Stockholm’s mayor since 2018, is harnessing this cooperation in the “electrification pact” – an all-out effort to boost electric vehicle infrastructure and electrical capacity. By 2030, Stockholm aims for all parking spots in the inner city to be equipped with chargers and for all traffic there to be emission-free.

König Jerlmyr believes the city’s 2040 goal is well within reach.

Women mayors find inspiration in each other. Asked about exciting ongoing urban initiatives, König Jerlmyr points across the globe to Freetown, in Sierra Leone, where Mayor Yvonne Aki-Sawyerr has launched a project to plant one million trees on the denuded hills surrounding the capital city to mitigate flooding and landslides , while creating rural jobs to stem urban migration.

The project reflects the kind of lateral thinking that is required to address climate change, in both the Global South, where women mayors in Accra (Mayor Elizabeth K. T. Sackey), Mexico City (Mayor Claudia Sheinbaum Pardo) and Bogotá (Mayor Claudia López Hernández) are leading bold sustainability initiatives, and cities in the north. “I’ve always been after the triple bottom line,” says Calgary’s Gondek, referring to the triad of social, economic and environmental factors that inform good policy. “You have to blend priorities.”

Beate Weber-Schuerholz, the first female mayor of the southern German city of Heidelberg, who served in the position for 16 years beginning in 1990, believes this is something women do particularly well. “Women rarely have the chance to ascend the ladder directly,” she says, referring to the balancing act of family and career. “The steps they go up are very broad.”

She believes this shared experience makes women more inclined to compare notes – to learn from, rather than compete with, each other – and equips them well to confront the cross-cutting challenge of climate change, at once highly technical and deeply human.

Meet five women mayors blazing a greener trail

Anna König Jerlmyr
Stockholm, Sweden

Anna König Jerlmyr wants Stockholm to become the world’s first climate-positive city by 2040 and fossil-fuel free by 2030. To do so, she is looking to completely electrify the city’s transit system and take advantage of emerging carbon capture and storage technology.

Jyoti Gondek
Calgary, Alberta

One of Jyoti Gondek’s first orders of business after she was elected in 2021 was to pass a motion in city council declaring a climate emergency. In her campaign to become Calgary’s first female mayor, Gondek made climate change and resilience a key priority for the oil and gas capital of Canada.

Claudia Sheinbaum Pardo

Mexico City, Mexico

As a former environmental engineer, Claudia Sheinbaum Pardo (Mexico City’s first female mayor, elected in 2018) focuses her efforts on reducing vehicle emissions and expanding the city’s public transit. Her ambitious plans also include tackling the water crisis.

Valérie Plante

Montreal, Quebec

First elected in 2017 (and re-elected in 2021), Valérie Plante has led Montreal’s campaign to slash emissions by 55% below 1990 levels by 2030. She also plans to implement a zero-emission zone in downtown Montreal by 2030, plant 500,000 trees and electrify public transport.

Anne Hidalgo
Paris, France

Anne Hidalgo has led a transformation of the streets and public squares of Paris to make them more friendly to walking and cycling since she was elected in 2014. Her administration has shut off car access on one side of the river Seine and spent €150 million building 300 kilometres of bike lanes.

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The four Canadian ETFs that focus exclusively on gender all launched within the span of a year, with Evolve Fund’s Evolve North American Gender Diversity Index ETF kicking things off in mid-2017. And soon after, Mackenzie Investments, RBC, and BMO Global Asset Management all launched gender-focused ETFs of their own, giving everyday investors access to stocks with more women in the leadership than most. RBC’s was the only fund to exclusively track Canadian companies.

As it stands, just 17.9% of women occupy board seats around the globe, as of late 2018. MSCI Inc., the global provider of equity, fixed income and hedge fund stock market indexes, predicts that it will take until 2029 to reach a worldwide average of 30% women on boards among MSCI All Country World Index (ACWI) companies. In Canada, the global non-profit Catalyst is striving for a much earlier date, asking all corporations to reach that goal by 2022.

Canadian companies are getting close, with a reported 27% of women on boards. But we’re still a long way off from true gender parity. Thanks to growing interest from investors (including gender-focused funds) companies are starting to pick up the pace on this issue, says Tanya van Biesen, executive director of Canadian operations at Catalyst. Diversity policies aren’t mandatory in Canada, but the Ontario Securities Commission’s “comply or explain” rule essentially requires companies listed on the TSX to disclose the number of women on their boards as well as their policy on diversity, or else explain why they don’t have one.

Catalyst is urging companies to see diversity and inclusion as a talent issue and essential to creating a productive, innovative and profitable workforce.

Top 25% of organizations that have gender diversity in their executive leadership teams beat out the industry average on profitability and value creation.

“If [companies] are looking for motivated, educated, and talented people, [women are] an obvious place to look,” van Biesen says.  “There have been many studies done to indicate that a gender diverse team generates better outcomes that relate to reputation, financial performance, productivity, innovation and risk management.”

Investors should take note: investing in companies with gender imbalances can cost you – the top 25% of organizations that have gender diversity in their executive leadership teams beat out the industry average on profitability and value creation, according to an oft-cited January 2018 report by management consulting firm McKinsey & Company, an organization dedicated to improving the performance of corporations.

For investors who want to make a difference with their money, several firms have launched Canadian ETF products dedicated to this cause. How do they stack up when it comes to women in leadership?

Mackenzie Global Leadership Impact ETF establishes itself as the clear winner when measuring board diversity — its holdings have an average of 34.7% of women sitting on its companies’ boards.

Other gender diversity metrics reveal that the fund’s holdings have 30% of women in senior management and 34% have a woman CEO or CFO, according to statistics based on holdings as of August 31, 2018.

Evolve North American Gender Diversity Index ETF fares the worst in this lineup when it comes to women on boards (26.8%). To be fair, the ETF is optimized for a range of gender equity criteria that goes beyond the number of female directors. It follows the Solactive Equileap North American Gender Equality Index, which scores companies on 19 different criteria, such as the gender balance of senior management, recruitment strategy, supplier diversity, and freedom from violence, abuse and sexual harassment.

Michael Simonetta, chairman of Toronto-based Evolve Funds Group Inc., says gender diversity should be measured across company culture, so it’s “not really a concern” if Evolve North American Gender Diversity Index ETF has a lower number in the women on boards category than competitive funds.

“You can have a board with 40% women, but if your policies are negative toward women in the workplace, how good is that from a gender balance perspective?” he asks . “It’s not.”

Fund Face-off

So, how well does the leading fund, Mackenzie Global Leadership Impact ETF (MWMN), hold up against one of the standard ETFs not pre-occupied with gender diversity?

The Mackenzie ETF trumps its benchmark (iShares MSCI World ETF) when it comes to promoting environmental, social and governance issues, with superior scores on average CEO-to-worker pay, gender diversity on boards, and its carbon footprint. Interestingly, the positive gender screen also results in more exposure to companies with products or services that benefit the environment, and less exposure to companies whose products or services have negative impacts like weapons and gambling stocks.

With regard to returns, the Mackenzie ETF is ahead of its iShares benchmark (XWD) on a year-to-date and one-year total return basis, but since its inception on December 3, 2017, it is behind with a 10.8% total return versus 12.5% for the benchmark.

Bottom line: the Mackenzie ETF offers investors significantly more gender diversity, a slightly better sustainability profile and comparable returns, beating its benchmark in two of the three time periods evaluated.

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Women rising

Walking the talk: North American diversity policies failing to deliver

As of this year, most corporations have a formal diversity policy, but that doesn’t necessarily translate into higher levels of women at the top.  Case in point: 92% of North American companies have adopted diversity policies, 5% more than European firms. Meanwhile, Canadian and American companies lag behind their European and Australian peers in terms of gender diversity in leadership. It’s a clear sign that having a diversity policy is far from enough.

Target practice: Australian and European firms seeing results with gender targets

Canadian and American companies seem be reluctant to set quantifiable internal gender targets at the risk of being held accountable. Targets continue to remain a more European and Australian practice. Australia, in particular, has shown that even in the industries most traditionally perceived as male, such as mining, these targets produce results by attracting more women in the workforce with management and leadership roles.

% of women in leadership and management positions by country

Canadian corporations at the back of the global pack

To be blunt, Canada doesn’t fare well in LeaderXXchange’s global rankings conducted. First, LeaderXXchange only focuses on the largest publicly-traded companies in North America; it doesn’t rank the entire public company universe. However, it’s pretty clear from LeaderXXchange’s research that Canadian companies are more closely correlated to their American neighbors than they are to Australia (which has a similar industry base to Canada). While 93% of Canadian companies adopted gender policies, just 20.5% of board directors are women(versus 32.5 % in France). While three quarters of French companies disclose the number of women in management, only 31% of Canadian companies do (for more details on the Canadian scene read Don’t Fear the Gender Quota).

“If Canadian companies and regulators were to replicate what Australian companies have accomplished, it would rapidly move from laggard to leader,” says L’Helias. France and Australia adopted similar objectives using different strategies. France and Australia adopted similar objectives using different strategies. France adopted a 40% gender quota for boards and requires reporting on gender pay gaps, promotion gaps and more. Australia adopted the “comply or explain” model.

Changing board rooms, lagging C-suite

It’s become clear that having diversity in leadership and management is critical to attracting and retaining talent – as well as investors. Institutional investors have actually been the driving force behind gender shifts in boardrooms, particularly in Canada and the US. In fact, gender diversity on boards has become the leading issue investors want directors to address, alongside executive compensation and climate change. To hincentivize laggards, several large institutional investors, including New York’s State Comptroller, have adopted strict voting guidelines to vote against nominating committee members of boards that have no women. It’s no wonder that as the proxy season approaches, a number of highly visible companies – particularly in the tech sector – have added women on their boards.

The diversity advantage: Studies are revealing that diverse groups make better decisions. Researchers are finding that diversity brings a level of complexity to the decision-making process that reduces blind-spots and increases the probability of better identifying and assessing risks and opportunities.

Regardless of progress at the board level, the glaring reality is that the world’s largest corporations are stalled in second gear when it comes to hiring women in C-suite leadership roles. Top senior executive officers with the letter C in their title (CEO, CFO, CIO, COO, CSO) lag behind on gender in all markets.

It’s a problem that’s not going to fix itself. Says L’Helias, “Companies need to expand their efforts to fix the leakage in the gender leadership pipeline if they aim to close the gender gap in those critical roles.”

Average % of women in leadership and management positions by region

Some sectors are leading the way

Sectors can and do change. Once a notorious “boys club,” the financial sector now has the largest number of companies that outperform LeaderXXchange’s median score. What gave? For one, L’Helias points out that the 2008 financial crisis created a crisis of confidence. Investors and regulators used their new leverage to focus on improving the industry’s governance, particularly the banking industry. Employees and clients were also adding pressure.

After massive layoffs, the sector had became less attractive to young recruits. Moreover, clients (institutional retail and high net worth) voiced their concern about the lack of gender diversity.  Finally, in the United States in particular, the financial industry was subject to a number of class action lawsuits for racial and gender discrimination.

Number of companies performing above the global average

by sector

Percentage of companies performing above the global average

Nonetheless, while the financial industry has made great strides, and exceeds the median score, few financial institutions land in the top 50. That’s because there is significant room for progress for the C-Suite.

Notably, utilities and manufacturing have also statistically outperformed LeaderXXchange’s median grade.  The sectors are fighting to attract and retain talent at a time of intense competition and new disruptive technologies.

“By creating cultures that are more inclusive and closing the gender gap, these industries are signaling to female candidates, who may not have thought of working in these sectors, that they are welcome,” says L’Helias.

“Perhaps that is what the data is telling us: companies that want or need the change – make the change.”

The LeaderXXchange Gender Diversity in Leadership ranking uses a proprietary methodology created by Sophie L’Helias, President of LeaderXXchange, an international corporate governance expert, experienced board director, former managing director of an activist hedge fund and international M&A attorney in New York and Paris.

LeaderXXchange is a change-driven organization that promotes diversity and sustainability in governance and leadership with investment methodologies and other solutions – most recently the Gender Diversity Exchange, the award-winning search engine dedicated to Gender Diversity in leadership.

The proprietary data used for the ranking is provided by Vigeo-Eiris, a global provider of environmental, social and governance (ESG) research to investors and companies. Based in Paris, with offices around the world, the Vigeo-Eiris team is composed of a diverse team of more than 200 experts from 28 countries dedicated to bringing high quality data.

The post Who runs the world? The global status of women in leadership appeared first on Corporate Knights.

Women are increasingly driving the global economy. According to a 2009 Harvard Business Review article, women controlled $20 trillion in consumer spending each year. Morgan Stanley reports that women control $11.2 trillion of the United States’ investable assets, too — assets held in one’s bank account, stocks, bonds and certificates of deposit.

Furthermore, investing that takes environmental, social and governance — ESG — issues into account has grown in popularity as women seek more meaningful investment options than traditional investors have. Commenting on a recent surveyof high-net-worth individuals, Jackie VanderBrug, a senior vice president and investment strategist at U.S. Trust, said just over half of respondents expressed interest in social and environmental impacts of their investments. For women and millennials, that rate jumped to 73 percent, according to VanderBrug — suggesting that as women invest more, ESG investing could become the norm.

Increased market attention to social and environmental issues is helping these issues gain broader public recognition. But the most important thing we can do to maximize women’s influence on finance and sustainability is to place more women in positions of power in boardrooms and C-suites.

One study from the Haas School of Business at the University of California, Berkeley, that looked at ESG categories across more than 1,500 companies found that companies with more women on their boards were more likely to address and reduce environmental risk through actions such as measuring carbon emissions, avoiding biodiversity disturbance and investing in renewable energy.

At the executive level we see companies such as Estée Lauder Companies Inc. — where women make up close to one-third of the executive team — committed to managing and understanding environmental, social and economic impacts throughout their value and supply chain, focusing on energy, waste, recycling and workplace safety. In a message to stakeholders, Pamela Gill Alabaster, vice president of global corporate responsibility for Estée Lauder, wrote that the company is planning to implement new governance structures, develop climate change policies and weave sustainability across its brands. Alabaster went on to note that Estée Lauder is continuing to increase how it transparently communicates on progress with its stakeholders, a critical component of long-term corporate improvement.

Estée Lauder is not alone. A Barclay’s report in partnership with the Economist Intelligence Unit highlights that gender diversity — specifically, the presence of women in senior management — is a main indicator of a company’s commitment to ESG criteria.

Estée Lauder is also one of the leading companies on the Pax Ellevate Global Women’s Index Fund, headed by Sallie Krawcheck, former president of the Global Wealth & Investment Management division of Bank of America and a notable promoter of gender diversity in the workplace. Krawcheck is working to ensure that the positive influence of women within companies grows. The Pax Ellevate Global Women’s Index Fundis the first of its kind dedicated to companies highly rated for advancing women. Every company in the fund has at least one woman on the board and 99 percent have two or more, resulting in women holding 32 percent of total board positions and 25 percent in senior management — compared with worldwide averages of 12 percent and 11 percent, respectively.

According to Kathleen McQuiggan, senior vice president of global women’s strategies for investment firm Pax World Management LLC — part of a partnership forming Pax Ellevate Management LLC, which manages the Pax Ellevate Global Women’s Index Fund — “If you have more women on the board, you see more women in senior management. It’s a simple cause-and-effect scenario.”

That’s exactly what the Thirty Percent Coalition is trying to accomplish. The group of over 70 women’s organizations, institutional investors, corporate governance experts and others is committed to placing women in 30 percent of board seats across public companies by 2016. Sponsors of the coalition include big brands with big dollars, such as Avon, Wal-Mart and Prudential. Members include representatives from companies such as Trillium Asset Management, an ESG-focused investment management firm, and the Sustainability Group, a wealth management firm that centers on a commitment to sustainability and human dignity founded by Amy Domini, an investment advisor focused on ethical investing.

In 2014, for the third time, investors who support the 30 Percent Coalition — and who represent more than US$3 trillion in assets — sent letters to 100 prominent companies calling on them to boost the presence of women on their board. Efforts so far have resulted in about 20 major companies adding women to their boardrooms.

Meanwhile, it’s never been easier for consumers to support companies committed to gender diversity — and the ecological and social consciousness it brings with it. The BUY UP Index, for example, is an app that rates brands and the companies behind them based on their gender diversity in the boardroom, C-suite and workforce as well as on their philanthropy and how they market to women. Amy-Willard Cross, founder of the BUY UP Index, states, “It’s important to bring capital to women, or to women-owned companies, not just sell us stuff.”

As more women become embedded in high-level investment, executive positions and boardroom decision-making, the conversation is shifting toward one that incorporates sustainability as the new norm. Therefore, it’s critical that those with the ability to promote gender diversity in companies continue to do so. And it’s just as important for the rest of us to put pressure on them to recognize the benefits of gender diversity. As we do, we can help usher in a future where, as U.S. Trust’s Jason Baron puts it, “no discernible distinction will exist between investors in ESG and investors in general.”

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