Twenty-one. That’s the number of women who were CEOs of Fortune 500 companies as of January 2013. If you double that figure you have the total number of women holding CEO positions in the Fortune 1000. While the likes of Meg Whitman [Hewlett-Packard (NYSE:HPQ)] and Virginia Rometty [IBM (NYSE:IBM)] hold the top spot in two of the 20 largest companies, it’s tough to boast that there are more female CEOs than ever before when they make up only 4.2% of the total.

According to Catalyst, a nonprofit focusing on women in business, women held just 16.6% of the 5488 corporate board seats of Fortune 500 companies in 2012. While women held 19% of governance chairs, they made up only 3.3% of board chairs, and even when there are multiple female directors serving together this happens in less than 25% of Fortune 500 companies. Less than 2% of companies have women holding at least 40% of director positions, far less than the 10.3% of companies with no women in the boardroom at all.

SEE: Female CEOs Who Climbed The Corporate Ladder

Women on Wall Street
So, what of Wall Street and the financial giants of America?

  • Four companies with no female directors in the Catalyst study were financial and insurance companies: BlackRock (NYSE:BLK), Fidelity National Financial (NYSE:FNF), First Data, and INTL FCStone (Nasdaq:INTL). There were 46 available executive seats in these companies combined.
  • One financial company, Western & Southern Financial Group, had a single female director.
  • Eighteen financial firms had at least 25% or more female directors, with WellPoint (NYSE:WLP), KeyCorp (NYSE:KEY), Pacific Life and TIAA-CREF having at least 35%.
  • One financial firm, KeyCorp, had a female CEO.

The stats laid out above may seem startling, especially as many readers may think that society as a whole has embraced women in the workforce much better than a hundred years ago. While there has been improvement, the last bastion of the glass ceiling may be the glass-walled boardroom.

Women Around the World
The Economist recently published its own index of the state of the modern glass ceiling, taking into account the number of men and women with college degrees, the percentage of women in the labor force, the wage gap between men and women, child care costs and the percentage of women in senior-level positions across 26 countries. The index compared 26 countries and showed that the best countries for working women (not just CEOs) were New Zealand, Norway and Sweden. Switzerland, Japan and South Korea held the bottom of the list. While The Economist’s index is simplistic, it does show that some countries seem to be handling gender in the workplace better than others.

SEE: The Best Financial Careers For Women

The percentage of female executives in United States isn’t that much worse than many other rich world countries, including Germany and Britain. Norway, taking up the egalitarian banner of Scandinavian countries, employs a quota system and has nearly 40% of its corporate board seats held by women. The problem isn’t just that the percentage is low compared to the percentage of women in the overall workforce, it’s that the percentage of women holding corporate board seats has barely changed in years.

The idea of setting quotas (à la Norway) requiring companies to sit a certain number of women on corporate boards causes the old guard to gnash their teeth, yet this seemingly antediluvian posture may be slowly evaporating. Companies have recognized that future leaders will come from aspiring managers of both genders, and estimates of rich world companies have roughly half of new candidates being women. However, this has not translated into more upper-level managers. Why is this happening?

Where the Problem Lies
Rather than focusing on the pinnacle of corporate governance, companies should pay more heed to the rungs of the ladder that lead to the boardroom in the first place. In 2010 women made up less than 18% of senior managers, meaning that companies hiring the next crop of corporate board members had a smaller pool of female candidates from which to fill vacant seats. Some studies have pointed to the percentage of women with specializations outside of the “core,” as HR positions tend to not lead to the boardroom. This is unlikely to be the primary culprit.

What may be other causes for this gap? First, if there are fewer female senior managers today, the next generation of female employees will have fewer mentors of the same gender to draw inspiration and guidance from. When one considers the cutthroat nature at “the top” of a Fortune 500 company, having someone teach you the ropes is crucial to coming out on top in one piece.

The second reason is that when it comes to choosing new board members, birds of the same feather may very well stick together. Many executives are white males and when given the option of working with someone of a similar background, or someone unfamiliar – regardless of qualifications – the existing board may shy away from the unfamiliar.

A third reason is that companies may be sticking to old adages when explaining the lack of female candidates for top positions, especially those that assume that women leave a company to raise a family. While this may certainly be the case at times, the environment in which employees must operate and grow (including the aforementioned existence of mentor-caliber managers) may act more like a meat grinder than a funnel to the top.

SEE: Are Female CEOs Still Underpaid?

The Bottom Line
The strategies being employed by big companies to increase the number of female managers vary. Some have created more flexible work environments and rewarding performance more so than putting in the hours. Others are looking outside the office walls by pushing suppliers to have a greater proportion of female managers and are trying to increase the number of suppliers owned by women. Some companies have more physical quotas, requiring more women to be added if a business line wants to add more men.

And things are improving, albeit slowly. In 2011, IBM hired its first female CEO in its 100 year history. Virginia Rometty became the ninth CEO to manage one of America’s premier firms. She represents all that companies are looking for when it comes to the upper echelon of leadership, having led business lines that have proved promising. The outgoing CEO Sam Palmisano said that Rometty earned the top spot because she was the best candidate, and that IBM wasn’t making this choice because they wanted “progressive social policies.” And that’s the crux of the argument: it is only when companies see value in having employees from diverse backgrounds and management styles that the business environment will really improve.

Editor's Note: This article has been republished with a correction. Previously it was reported that Liberty Mutual Insurance Group had zero women directors, when in fact, the company had three women directors at the time this article was first published.

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