It’s the list that tells us what’s happening at the very top of US business, identifying and profiling the 500 corporations with the most revenue in any given year, so when it comes to tracking the way business works, the Fortune 500 cannot be ignored.
That’s why it’s so dispiriting that analysis of the list reveals only one in five board places at the top are held by women. Twenty-four of the companies currently on the list have no female board members at all, and 110 have only one. Only five percent have female CEOs. What’s going on? Aren’t we in the 21st century now?
A wider problem
One of the reasons why the Fortune 500 matters is that it sets an example to other businesses, which look to it for indicators of what could make them successful. But the shortage of women in top companies is also a symptom of a wider problem. It highlights the way that women are systematically excluded from senior positions in industry.
Despite efforts made by federal, state and charitable bodies, campaign groups and business leaders themselves, there is still a glass ceiling. The expectation that getting more women into management roles would eventually produce more female CEOs has not been borne out.
Is this deliberate? It’s difficult to say. Some experts think that in a society where men are more likely to socialize with other men than to have female friends, and where who you know is a significant as what you know when it comes to getting promoted, it’s only to be expected.
Others think that many men don’t realize how serious the problem is because of an innate cognitive bias: if you’re not used to seeing members of a particular minority in a group, once 25 percent of the group is made up of them it will look like a lot, simply because our brains are primed to focus on what’s unusual. But whatever the cause, it’s a serious problem – not just for women, but for business itself.
Why it’s good business to include women
Research conducted in the US, the UK and India in 2015 found that companies with at least one female director outperformed those with none by 1.91 percent – a proportion that might seem small, but not when you consider the margins at the top.
A comparison of the Fortune 500 with the World’s Most Admired Companies list reveals that having more women on the board also correlates with a company achieving a higher reputation, a really important factor to consider when it comes to brokering deals and one that, thanks to the internet, is increasingly relevant to customer choice.
Perhaps the single most important reason why this change matters from a business perspective is that when hiring decisions are biased toward men, talent is being selected from a smaller pool. This means companies are missing out on some of the smartest and most highly skilled professionals, and that harms the whole economy.
Case study: Noble Group
One corporation that has made a policy of promoting women is commodities trader Noble Group. When Yusuf Alireza took over the struggling company in 2012, he vowed to change the whole ethos of how it was governed.
As well as selling off assets to get rid of its debts and slimming it down to make it more manageable, he stressed the importance of creating opportunity for women at the very top level, bringing fresh perspective to the board and making sure that it wasn’t inadvertently missing out on talent.
Prospects for change
Is there any likelihood of business becoming more inclusive in the future? Unfortunately, progress in top companies is slow. A more cheery thing to consider is the way new companies are developing, with almost a third now owned by women, a figure that is growing all the time. Although it will take quite some time for these businesses to be competing at the top level, their growth suggests that progress is happening steadily, if not swiftly.
So what can you do if you want to get ahead? It’s not fair, but you’re going to have to work harder than your male peers. Despite the double standard that labels assertive women as pushy, it does help to make a point of asking about promotions and pointing out situations in which your skills make you a good choice for advancement. If you do manage to get to the top, supporting the promotion of other women means you can do your bit to change the system.