Corporate Leadership by Gender

Women remain underrepresented in top positions

Anyone looking for hope that women will finally achieve anything close to equality in the business realm need only look at the record number of women running large corporations these days. Nevertheless, that fact obscures a more worrisome reality: C-suites are still overwhelmingly the domain of male executives.

While females comprise nearly half of entry-level positions, their ranks gradually thin out the higher that one goes up the organization ladder. While the challenge of choosing between motherhood and career certainly contributes to that phenomenon, research suggests a number of reasons why men are more likely to ascend the corporate ladder. 

We found little research on transgender or nonbinary leadership in corporations overall. 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.” One standout at at the top of the salary scale of women CEOs in the United States, however, is a transgender woman: Martine Rothblatt, founder and CEO of United Therapeutics. Based on the data that we did identify, this report focuses on how executives identified by researchers as women are faring.

Key Takeaways

  • Of the Fortune 500 CEOs, only about one in 11 was female as of 2021.  
  • The ranks of female chief executives have more than doubled, however, in the past decade alone. 
  • The reasons often cited for a lack of gender diversity include women’s greater tendency to sacrifice career for family, conscious and unconscious bias, and a lack of mentorship opportunities. 

Women as CEOs

When Fortune published its list of chief executive officers (CEOs) at the 500 largest U.S. companies in 2021, the number of women represented an all-time high: 41. 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. A 2018 analysis for The Associated Press, which looked at nearly two-thirds of Fortune 500 chief executives, revealed that women collected an annual compensation of $12.7 million on average, versus $11.2 million for men.

Even so, the fact that only 7.4% 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. In fact, female leadership positions actually shrink slightly, to 6%, when you expand the pool to the nation’s 1,000 largest companies, according to a 2019 analysis by the management consulting firm Korn Ferry.

Only 37 of the CEOs at Fortune 500 companies are female.

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. The C-suite at the top 1,000 U.S. revenue-producing corporations has female members in only 25% of such roles, according to the latest figures from Korn Ferry.

Women are disproportionately represented in chief human resource officer positions (55%) and chief marketing officers (36%). In terms of industry, the financial sector has the highest percentage of women in the C-suite (31%), followed by healthcare (26%) and retail (25%). 

And what about corporate America’s largest boardrooms? Women are represented in roughly the same way. At Fortune 500 companies, only 28% of independent directors were women in 2020, according to the executive search firm Spencer Stuart. That gap is tightening, however. Females made up 47% of new board members last year, compared with just 21% a decade earlier.

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

Perhaps the easiest explanation is that, in the corporate world, women feel the tension between work and family life more than men. Indeed, women were significantly more likely than men to reduce their work hours to take care of their children, according to a 2019 survey by the Pew Research Center. The Pew survey found that 50% of mothers believed that being a parent was a hindrance to their career advancement; only 39% of men felt the same way.

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. “Many employees—especially those who are parents and caregivers—are facing the choice between falling short of pre-pandemic expectations that may now be unrealistic, or pushing themselves to keep up an unsustainable pace,” the authors wrote.

“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 retiring chief executive of PepsiCo, acknowledged that dilemma as her company sought to find her replacement in 2018. “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 2017 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

Women earn the majority of college degrees and occupy nearly half of the entry-level positions at U.S. corporations. Nevertheless, at the upper echelons of American corporations, women hold but a fraction of the roles. The fact that only around 8% of Fortune 500 CEOs are female is particularly arresting. While there has been growth in female leadership over the past decade, experts say most companies haven’t done enough to increase the pipeline of talent. That surely also holds true for talented managers and executives who identify as nonbinary, gender fluid, and gender nonconforming.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. McKinsey & Company. “Women in the Workplace 2020,” Page 8.

  2. Harvard Business Review. “Transgender, Gender-Fluid, Nonbinary, and Gender-Nonconforming Employees Deserve Better Policies.”

  3. Inc. “The Highest Paid CEO Is a Transgender Founder (Who Built a Robot Version of Her Wife).”

  4. Fortune. "The Female CEOs on This Year's Fortune 500 Just Broke Three All-Time Records."

  5. Fortune. “The Number of Female CEOs in the Fortune 500 Hits an All-Time Record.”

  6. The Associated Press. “Female CEOs Are Competitively Paid, but Greatly Outnumbered.”

  7. Korn Ferry. “Korn Ferry Analysis of Largest U.S. Companies Shows Percentage of Women in C-Suite Roles Inches Up from Previous Year.”

  8. CVSHealth. "Meet Our New CEO, Karen S. Lynch."

  9. Spencer Stuart. “2020 U.S. Spencer Stuart Board Index,” Page 6.

  10. Pew Research Center. “Despite Challenges at Home and Work, Most Working Moms and Dads Say Being Employed Is What’s Best for Them.”

  11. McKinsey & Company. “Women in the Workplace 2020,” Page 6.

  12. McKinsey & Company. “Women in the Workplace 2020,” Page 14.

  13. National Academies Press. “Barriers for Women in Corporate Culture.”

  14. CIO. “Women Still Underrepresented in Fortune 500 Leadership Roles.”

  15. Stanford Graduate School of Business. “Diversity in the C-Suite: The Dismal State of Diversity Among Fortune 100 Senior Executives,” Page 2.

  16. The New York Times. “When a Female C.E.O. Leaves, the Glass Ceiling Is Restored.”

  17. McKinsey & Company. “Women in the Workplace 2020,” Page 41.

  18. Boston Consulting Group. “Dispelling the Myths of the Gender 'Ambition Gap'.”

  19. American Enterprise Institute. “Stunning College Degree Gap: Women Have Earned Almost 10 Million More College Degrees than Men Since 1982.”

Open a New Bank Account
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.