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Very few women are the top in the business world. Culprit? Societal failure.
Categories: Career Talk, Entrepreneurship
As someone who has been in the business world for most of my career, I am always interested in the topic of why there are so few women running companies or starting high-growth companies. So this article in Business Week, about the dearth of women entrepreneurs, caught my attention.
The author cites a few non-surprising statistics:
No woman has ever been CEO of a Wall Street firm.
Women were primary owners of only 19% of the 237,843 firms founded in 2004.
I say non-surprising because I am well aware of how few women hold top positions in business and finance. During my five years in venture capital, I ran across very few women who held senior positions in other firms and got used to scanning networking events for one or two women in the sea of make suits.
When people talk or write about why more women aren’t don’t hold top positions in business, there are common themes that emerge:
Women don’t want to hold these high-stress positions because they want to spend more time with their kids.
Women are less ambitious than men.
Women get off the corporate ladder to raise kids and it’s too hard to climb back up when they return to work.
I am sure some of this is true. In fact, there is some evidence to suggest that women don’t, in fact, want to run big companies. (And while I’d argue that there are enough ambitious women to run tons of companies, the fact that ambitious women are often considered bitchy makes it tougher for them to rise to the top.)
But the Business Week article suggests another take on this topic:
Evidence suggests that this does not reflect a failure on the part of women but rather a societal failure. Consider the contrast with India, a country that is in many respects more conservative than the U.S. It might therefore be expected to be even less amenable to women in leadership. Yet there, women are rapidly rising through the top ranks of the business community.
In India, women are in charge of divisions of some of the largest financial firms, like UBS and JPMorganChase. One in five big banks, insurance and money management firms in India is run by a woman, but there are no women in charge of a major bank in the United States (or Europe, for that matter).
So what’s the reason? Perhaps it is the fact that in India, the business and financial sectors are relatively new as compared to the US and there is no entrenched male-dominated culture and networks that stand in the way of women rising to the top. Women are then able to compete with men on more equal terms for the top positions and there are no societal stereotypes that stand in their way. As this New York Times article notes, women at the top of financial firms in India don’t feel the need to act like men; many often wear saris to work and openly talk about their families and kids.
Perhaps societal stereotypes and expectations with regards to women’s roles can and will change. (With women breadwinners at the highest level ever, there is evidence that this is already happening.) Personally, I’m cautiously and very mildly optimistic. Having been in that world, I think it is going to take a looooong, long time for the culture to change.
Why do you think there aren’t more women at the top in the business world? Would you ever want to run a large company or start one?
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Well, first of all, if I wanted to rise to the top, the last place I’d make my career is at a bank. They are about as close to government inefficiency as you can get in the US private sector. So maybe that is one factor in the equation you mention.
As far as wall street, I don’t know why that is. I wouldn’t want that job, can’t even relate to such a desire, so I think I’ll have to leave it at that.
Other than that, 19% (US) is about the same as one in 20 (your India figure). So who knows? Aren’t a lot of those companies foreign-based (including US-based) companies, by the way? From my experience, Indian career women take a great deal of pride in their work. They are also much more likely to have help with their homes/kids (maids, nannies, extended family), and to come from a family background that doesn’t look down on mothers for not being their child’s primary caregiver. Furthermore, the average Indian professional woman may have fewer kids than the average US professional woman. So all these factors are probably in play, in addition to the relative newness of the local industry (finance used to be government-run until recently). But yes, not having an entrenched “old boys network” is probably a factor too.
I happen to be a partner in an all-woman firm that is successful, growing, and making a national name for itself. We effectively compete with much larger male-owned firms. However, we don’t want to grow too much at the expense of maintaining the high quality level that got us on the success track in the first place. Size isn’t everything.
SKL | February 7th, 2010 at 4:47 pm
Since I work in engineering and construction, the answer is pretty obvious for my industry. The pool of women at entry level is much smaller than the pool of men. It stands to reason that if only ~10% of total entry level employees ever make it to the senior executive level, most will be men. (I made up the 10% figure.) I believe only 25-30% of engineering graduates now are women, so I can’t imagine how low that number was in the 1970s when the current E&C leaders were students. I think when we wonder where the women are, we forget how recent it was that women couldn’t even wear pants to school. Do I think we’re on track for more female leadership in the E&C industry, near-term? Not really. Again, the pool of candidates is still very small. I do think our best shot at being the CEO is to start and grow our own companies, but I don’t see a lot of women with ambition to do that. I went through a women entrepreneur FastTrac program last year, and probably 75% of the women were interested in starting lifestyle businesses. I don’t want to personally offend anyone, but we (the country as a whole) need more than people who want lifestyle businesses. We need people who are interested in creating value on a large scale. This is true for men and women. Starting a pooper scooper business might be a niche where you can make some cash and work for yourself, but you aren’t really adding value to the economy. Of course, there are probably only a handful of us who even worry about these things, and that’s the real problem. . .
AJB | February 8th, 2010 at 12:04 pm
Ten years ago I worked in a department of about 20 people. About 80 percent were women.
I recently went surfing through LinkedIn to see how many of my fellow alums I could find. As I tracked down more and more people, I came to the realization that every single one of the men who came through the department during my time there eventually became managers or higher. Only 2 of the women attained a management position in the same time frame, one of them is a VP. Both of them are unmarried and childless.
Utterly depressing.
Lisse | February 8th, 2010 at 2:40 pm
To say there is no male-hierarchy entrenched in India is laughable. I wonder two things; does caste play into it (easier to hire a higher-caste woman than lower caste man) and two, the demographics of the women in charge.
We have many employees here and abroad of Indian nationality. Of those I know, few are married, none have children. Some of it is age, but I wonder if some of it is unspoken choice; rise to the top OR get married & have a family.
I would not want to run a large company because of the inherent travel and time away from family. I’ve turned down job offers and promotions that required either extensive travel or extensive late in-the-office hours. Wall Street is known for those two things so perhaps, that is why fewer women are there.
Women are starting hedge funds, asset management firms. That is far more entrepreneurial than big company work anyway.
Mich | February 9th, 2010 at 4:21 pm
“To say there is no male-hierarchy entrenched in India is laughable.”
I think the author was talking specifically about industries that only recently started to be “imported” or “reimported” into India, largely led by foreign-based firms. You are absolutely right about the more traditional Indian industries. I am not sure about the new financial-oriented ones. However, if there were really no gender bias whatsoever, would the percentage of women leaders be higher than 20%? It’s hard to say. There are so many other (cultural) factors at play. I have many female friends/acquaintances in India, but I can’t think of a single one over age 30 who is in a family situation that would support the drive to be a high-power CEO.
SKL | February 10th, 2010 at 7:30 am
Unfortunately, I think I fall into the category of a woman who doesn’t want to hold one of those high stress positions that will impact the time I am able to devote to my family. Also, I did take a 3 year break from my profession with my 1st child which I’m sure negatively impacted my career. None of this really bothers me. Maybe I am naive, but I feel like the 19% of women who hold those powerful positions were the ones willing to put in the same time and dedication that the men who hold those positions put in. I was not willing to do that and therefore I hold a management position at a small, family friendly nonprofit. —exactly where I want to be and where the time and effort I’ve put into my career has brought me. ..I guess in other words, we reap what we sow.
AmyT | February 10th, 2010 at 4:15 pm
In my career field, women make up less than 3% of the total population. But my career field is most predominent in the military and state, federal and local governments. Where I work, I will never have the opportunity to be a corporate CEO because my company is not geared toward this field. They have us only by accident.
I am, however, the deputy in this office by virtue of being second most qualified and equally senior in time to my boss. My boss is my boss because he has many more years of actual people management positions under his belt.
When he leaves, I will be the boss.
Frankly, I don’t want him to leave any time soon.
Phe | February 12th, 2010 at 6:36 am
I should have added the following: Women make up this low number in this career field for many reasons:
1. It is widely offered but few want to do it.
2. About half of the women who enter training don’t finish.
3. Many leave for other career paths because they find that they don’t like it.
Phe | February 12th, 2010 at 6:38 am