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Grace Stinson


Why Do So Many Companies Lack Women Leaders?

According to the Bloomberg 2023 Gender Equality Index, women still make up only 8 percent of CEOs

Published: Tuesday, March 7, 2023 - 12:02

Women have always been and continue to be a fundamental cog in the constantly grinding wheels of capitalism. But Bloomberg’s recent report on gender equality in the workplace shows there are still major gaps between the status of men and women in modern-day workforces. 

Although half of the entry-level workforce of the companies included in the report was made up of women, only 8 percent of the same companies had women leading as CEOs. 

The narrative around gender inequality and business is fraught with latent bias, outdated ideas, and modern misogyny. But Bloomberg’s report, which prioritizes and rewards data transparency, is helping generate a neutral framework to aid the conversation. 

So, why are so many companies still lacking women leaders?

Bloomberg Gender Equality Index

The Bloomberg Gender Equality Index (GEI), launched in 2016, is helping answer this question by tracking the performance of public companies committed to transparency in gender-data reporting. 

However, the GEI is not a ranking of companies from best to worst. Every company included in the index has been ranked above a global threshold established by Bloomberg, so the index includes only companies that have already demonstrated a certain level of commitment to increasing diversity and inclusion.

The index promotes transparency as one of the key factors in achieving gender equality in the highest echelons of the business world. In a document describing the methodology used to create this index, Bloomberg GEI states: “By publicly releasing their gender-related data, these companies have fortified their commitment to gender equality internally and in the communities around them.”

The Women Business Collaborative agrees that transparency is the foundation for positive change, saying, “Transparent data is a powerful accelerator of change, encouraging accountability, reinforcing trust, and empowering people to advocate for themselves and others. Transparency is particularly impactful for diversity, equity, and inclusion (DEI), and an answer to the call for companies and organizations to focus on equity, inclusivity, and belonging.”

The formulation of the GEI score is weighted to reflect the importance of data transparency, as 30 percent of the final score is determined only by the level of disclosure of gender-related data. 

The other 70 percent of the GEI score is determined by “data excellence,” which refers to the actual content of the data given. The framework for judging whether a company is successfully increasing gender parity includes more than 70 metrics, each of which is allocated to one of five pillars:
1. Leadership and talent pipeline
2. Equal pay and gender pay parity
3. Inclusive culture
4. Anti-sexual harassment policies
5. External brand

Of these five pillars, the nature and inclusivity of the company’s culture is weighted the most heavily. 

‘By publicly releasing their gender-related data, these companies have fortified their commitment to gender equality internally and in the communities around them.’
—Bloomberg Gender Equality Index

The goal of the GEI is simple. By releasing a list of companies that are willing to share their gender-related data, Bloomberg hopes to aid investors, buyers, and prospective employees in choosing a business with which to interact.

It’s becoming more common for anyone who seeks to buy a product, find an employer, or invest in a business to choose a company based on its environmental, social, and governance (ESG) data.

Although gender equality is only one component of a company’s ESG factors, the Bloomberg index provides information for ESG-conscious investors, buyers, and workers so they can make more informed choices.

Bloomberg’s Gender Reporting Framework describes its raison d’etre: “Investors are waking up to the power of women. The Bloomberg Terminal is the only place investors can find comprehensive, comparable information for individual data points related to gender equality at publicly held companies.”

By promoting themselves as companies that care about these metrics, these businesses hope in return to receive greater investor interest, attract wider and better pools of talent, and appeal to ESG-conscious buyers.

The 2023 index includes 484 companies that span 11 sectors and 45 countries and regions.

What do the data say?

The information revealed by this index shows that, while more companies every year are committing to disclosing their gender-related data and addressing gender inequality within their company, progress for gender parity is going slowly. 

Out of the 484 companies in the index, only 8 percent had a woman as the CEO, compared to 7.5 percent in 2022.

In 2022, the World Economic Forum (WEF) noted that the overall gender gap across the domains of politics, work, health, and education will now take 132 years to reach full parity.

However, the number of companies that are willing to attempt to address gender parity and submit data to the GEI increases significantly every year. The index began in 2016 with 26 companies and has grown significantly every year since. 

This year, 11 percent more companies submitted data to Bloomberg GEI than last year.

The data that these companies provided demonstrated one clear pattern: While gender parity at the bottom rung of a company had no statistical effect on the gender parity throughout, the number of women at the top directly correlated with the degree of gender parity in the rest of the business.

It’s perhaps unsurprising that the presence of women at the highest levels seems to drive gender parity at all levels of a business. Corporations that have a woman CEO have higher representation of women at all levels, and companies whose board is at least 30 percent women are also more likely to have women executives.

The index also revealed that the GEI companies are, on average, hiring more women than they are losing them, and 63 percent require a gender-diverse slate of candidates for management positions. 

What is the state of the pay gap?

One of the five pillars of data excellence on which companies are judged is “equal pay and gender pay parity.” The average score for this pillar, determined via multiple metrics, was 64 percent this year, compared to 61 percent in 2022. 

However, it’s noteworthy that the rate of voluntary data disclosure for information regarding the pay gap is still significantly lagging compared to the rest of the data submitted for the index.

Companies with a woman CEO generally fared the best in this category. Bloomberg found that, on average, the mean gender pay gap is 50 percent lower in companies with women CEOs than those without. 

It also found that corporations with more women executives are more likely to conduct a gender-based compensation review to understand the gender gap in pay. Companies that undertake this type of assessment annually tend to have more success narrowing the gender pay gap. 

The effect of Covid

The index also suggested that Covid and its myriad subsequent effects have amplified existing disparities in the workplace and had a significant effect on the place of women in business. 

The burden of child care and elder care on primary caregivers, a role that primarily falls to women, increased during the course of the pandemic and will have been doubly challenging for those who also worked from home. 

Additionally, women made up a majority of the employees on the front line and were overrepresented in the industries that have faced the greatest financial effects from Covid.

In the United States, more than one million women have left the workforce. Women accounted for 63.9 percent of the 2.9 million job losses in the U.S. between February 2020 and 2022.

However, others suggest that the increased ability and acceptance of working from home has evened the playing field for women by making it easier to parent and work at the same time. Of course, this idea reflects the fact that many women will either have to balance their job with their role as a primary caregiver or make the clichéd choice between having a family and having a career.

How are companies supporting women who want families?

Not all women aspire to have a family. But many do, and the burden of parenthood still falls unequally on women in most societies. In addition to this, the burden of parenthood as a whole is becoming more challenging to navigate as times change.

This tricky balancing act affects the rates at which women choose to pursue more senior positions, which is one reason that a company’s parental leave policy is weighted so heavily in its GEI score. 

GEI members (excluding those in the United States) offer an average of 11.31 weeks of paid parental leave for primary caregivers, and 4.25 weeks for secondary caregivers.

In the U.S., as the only developed country without a federally regulated mandate for paid parental leave, figures for this metric for employees were analyzed separately; 61 percent of GEI members offer some form of financial support for childcare, 98 percent offer a flexible working location, and 94 percent offer a flexible schedule.

The index also tracks the other ways in which companies can ease the financial burden of starting a family by seeing how many companies offer services like adoption assistance, support for fertility services, and support for egg freezing. 

The introduction by corporations of policies to increase gender parity might seem like a one-dimensional issue: Women suffer from inequality, so for the sake of women, effort should be made to reduce inequality. However, studies also show that businesses perform better with a more diverse group of leaders.

Although framing the question as an issue of women’s rights should be enough to incentivize change, many companies around the world with less progressive politics will be uninterested in making change on this basis alone.

Framing the issue as a deciding factor in the overall success of a business will perhaps inspire more businesses to make meaningful change within their own corporate structures. 

By creating an index that has cultivated a sense of prestige, Bloomberg has already proven this to be true. It’s now a status symbol for a company to be included in the GEI, one that more companies across the world strive to attain year after year. 

However, if the rate of companies choosing to apply to the GEI continues to outpace the progress that the index reports, we must ask if it and its philosophy is truly succeeding in decreasing gender inequality, or if it’s just another example of faux feminism.

Impakter editor’s note: The opinions expressed here by the authors are their own, not those of Impakter.com. 

First published Feb. 17, 2023, on Impakter.com.


About The Author

Grace Stinson’s picture

Grace Stinson

Grace Stinson has an MA in Classics (Ancient Languages & Literature) from the University of Edinburgh, and is currently an editorial intern for Impakter.com.