Women in the boardroom

At the beginning of the millennium, there were only three women among the heads of large US public companies. In 2009, there were 12 women among Fortune 500 CEOs, wielding 2.4% of top leadership positions in the world’s top companies. While this is something to cheer about, the sobering fact is that there are only 29 women leaders (1.5%) among the world’s 2000 top performing companies.

Despite the best of efforts that women are making to secure top leadership posts, the world of business is still largely considered a man’s turf and women making it big here are often considered a rarity of sorts. As a Harvard Business Review study reported, in most cases women leaders are appointed from outside the company and often fare poorly in the internal race for the CEO’s post.

However, the good news is that all of these women at the top represent a significant change that has been sweeping boardrooms during this decade.

Of the 29 women CEOs of the world’s top 2000 companies, 19 were appointed after 2002. Most of them were given the job when the company was performing badly and needed an extra boost. For instance, under Indra Nooyi, PepsiCo grew by 12% in 2009 while Avon, under CEO Andrea Jung, grew by 34%.

These numbers are also likely to change significantly in the decades to come, with more and more women enrolling for management education. For instance, women comprise 36% of the Harvard Business School class of 2011. In India, too, the results are encouraging. The Indian School of Business in Hyderabad, ranked 12th in the world in the Financial Times Business School Rankings, had 26% of women among its students in 2009. Among its faculty, 16% were women.

There is also a significant uptick in the number of women entrepreneurs in the country. The Economic Times reports that IIM Bangalore’s Management Program for Women Entrepreneurs (MPWE) admitted only 60 women in 2007. By 2009, the course had 130 women in two batches. In 2010 there are over 200 applications for the course, which begins in April.

Things are also looking up for rural women. Established in 2006, the Maan Deshi Udyogini Business School for rural women, founded by economist and farmer Chetna Gala Sinha, counts among its students shepherds, tea vendors and fruit merchants. Located about 430 km from Mumbai, the school specifically addresses school dropouts and women without formal education.

Businessweek reported a few years ago that companies with the highest representations of women in leadership roles show better financial performance. However, while many top companies have women in key management roles, in the boardroom they are still no more than a token presence.

India has nearly four times the number of women CEOs as the US. A recent survey by EMA Partners International revealed that around 11% of Indian publicly held companies have women CEOs. However, it must also be considered that many of these leaders are from the families of the promoters. The true test of success will be when women are allowed to break the glass ceiling and rise up from the ranks into the boardroom.

Tagged as: boardroom, CEO, Fortune 500, gender equality, Indra Nooyi, management, Pepsico, women, women CEOs, women entrepreneurs, women leaders