Blogs / 11 Nov 2024 12 min

What does a gender-inclusive succession strategy look like? Key considerations for your C-suite

By Helena Wacko, Equity, Diversity & Inclusion Researcher

A gender-inclusive succession strategy is key to building high-performing leadership teams. At its core, gender-diverse succession planning is about creating equal opportunities, ensuring that everyone – across the gender spectrum – is equally represented from entry-level roles to the C-suite. Research also consistently shows that gender-balanced leadership leads to stronger financial results1,2, better decision-making3, improved stock performance4, increased innovation5, and enhanced environmental sustainability.6 However, recent data reveals that women in the US still hold only 29 percent of C-suite positions.7 Similarly, women in senior management across Europe account for just 34 percent.8 Globally, fewer than 5 percent of CEOs are women, and the disparity is even greater at the intersection of race and gender – only two Black women led Fortune 500 companies in 2023.9

This gendered discrepancy across organisational hierarchies is driven by gender disparities in the succession pipeline and the systemic challenges women and marginalised genders face on their path to leadership more broadly. The barriers they encounter – ranging from lack of sponsorship, work-family conflicts to biases in recruitment – make it imperative to reimagine how organisations cultivate leadership talent. Examining the gendered pipeline to power allows us to deconstruct assumptions about gendered leadership ambitions and identify societal and systemic obstacles. Companies must diversify their succession pipelines and target their efforts at career advancement towards reaching gender equity. That is why we offer a set of practical, tangible recommendations to help you do exactly that.

Leakage in the Pipeline: Why it Happens

In the corporate world, data reveals that the decline in women’s representation is primarily driven by gender disparities in promotion rates, rather than gendered differences in hiring or retention.10 Although women also face barriers already at the start of the pipeline, they tend to drop out of the leadership pipeline particularly at mid-career stages. In numerous organisations, the loss of women from middle management, a so-called ‘leaky pipeline’ or a ‘broken rung’ acts as a significant barrier to their advancement. In fact, a 2020 study conducted by Mercer, found a leaky pipeline in mid management across more than 1,100 organisations globally.11 And research from McKinsey demonstrates that the “broken rung” is especially pronounced for women of colour.12

Evidence highlights that at mid-career stages, women face barriers such as a lack of sponsorship, gendered bias in recruitment, and exclusion from informal networks.13 In other words, lack of women representation across the organisation is not to do with different ambitions according to gender, in turn effectively dispelling the “stubborn” theory that women are less ambitious than men.14 In fact, data from two global Boston Consulting Group (BCG) data sources, with over 200,000 respondents, demonstrate clearly that women start their careers with just as much ambition as men.15 The data also reveals that “having children does not affect women’s desire to lead”.16 Therefore, we must instead turn to recruitment and career advancement processes that favour male candidates, due to inherent biases, and that ultimately play a substantial role in shaping future leadership. Women are less likely to be considered for high-level roles due to stereotypes that define leadership in traditionally masculine terms. This is true across sectors, but particularly in the male dominated fields of science, technology, engineering, and mathematics (the so-called STEM subjects), where research has found that women were forced to apply a ‘resilience strategy’ where they act ‘more like men’, in order to succeed.17 Furthermore, informal sponsorship – essential for career progression – is less accessible to women. Findings from the global leadership consulting firm, Spencer Stuart, confirms that the absence of formal sponsorship structures disproportionately affects women, making it harder for them to access senior leadership roles.18

From Politics to Business: Why the gendered pipeline to power matters

Investigations of a stagnant or non-existent pipelines towards gender diversity is not exclusive to the corporate world. In politics too, researchers have been grappling with the issue of women’s and marginalised genders underrepresentation in seats of power. Here, as in the corporate world, researchers have made an argument about how the gendered pipeline to power is just as important, if not more so, than entry rates when it comes to the future of gender parity.19 These insights mirror the corporate world, where women are frequently winnowed out at critical career junctures due to bias. The gendered pipeline to political power significantly influences the corporate pipeline, shaping policies, legal frameworks, and representation. This impact extends to societal perceptions of who is capable of leading and the policies that support or challenge leadership compatibility with traditionally gendered responsibilities, such as caregiving.

Rethinking Traditional Succession Planning: The Gender Proportionality Principle

To tackle and ensure gender diversity across the organisational hierarchy, it is helpful to think of the gender proportionality principle, which stipulates that “a given level in an organization should aim to reflect the gender composition of the level immediately below it”.20 As women are more prevalent in lower-level roles, applying the principle of gender proportionality would lead to an increase in their representation at higher levels over time. In other words, it is a highly practical and attainable approach in the face of lofty or overly ambitious gender equality goals. Crucially, the gender proportionality principle is gender-neutral and can be utilised to enhance representation for individuals of any gender, across the gender spectrum. And the result? A more levelled playing field, where women and marginalised genders have a choice and fair chance at success.

Rethinking Succession Planning: Moving Beyond Past Performance and the “Great Man” Leadership Lens

Traditional succession planning often focuses on individuals with a history of high performance, relying on outdated views of leadership that prioritise assertiveness and individual achievement – qualities tied to the “Great Man” Theory. This theory suggests that leaders are born with innate qualities, rather than being shaped through experience or education, reinforcing a narrow view of who is suited for leadership. Such an approach not only overlooks the potential of women and marginalised genders, but also ignores the importance of team dynamics and the collective strengths needed for modern organisations.

By shifting the focus from past performance to future potential, and from individual replacement to team strengths, organisations can better align their leadership pipeline with the diverse needs of today’s workforce. For example, OCBC Bank’s MentorMe programme supports junior to mid-career women, regardless of whether they have been labelled as ‘high potentials.’21 This approach recognises that leadership potential is multifaceted and can be nurtured through mentorship, fostering a steady pipeline of motivated and engaged female leaders.

In other words, we must challenge outdated notions of potential rooted in the Great Man Theory and shift from focusing on past performance to assessing future potential – all while embracing a more team-oriented leadership approach over individual-focused models. Failing to do so perpetuates homogenous leadership compositions, resulting in narrow perspectives, groupthink, and a limited ability to meet the diverse needs of customers and employees.

Conclusion: Strategic Recommendations for Gender-Balanced Succession

To future-proof leadership pipelines, companies need structural and cultural changes that prioritise gender balance. This is no longer simply a diversity initiative but a strategic imperative for long-term business success. In other words, it is more than a ‘nice-to-have’. Gender-balanced leadership teams are not just better for business; they reflect a more equitable society, setting a precedent for future generations of leaders and consumers.

  1. Establish future needs: Focus on potential and team gaps rather than solely on past performance. This shift will inform your existing leadership frameworks and talent selection processes.
  2. Redefine potential: Many potential definitions are rooted in models that are biased against women. Models that reward ambition (sometimes described in potential models as ‘drive’ or ‘initiative’) can inadvertently penalise women who, must display ambition in a more modest way to avoid a societal penalty for being too ‘masculine’. Review your model to ensure no unconscious bias in built in.
  3. Allow leaders to work flexibly: Models that require leaders to be globally mobile, to work full-time or that prohibit job shares, part-time or other forms of flexibility will disproportionately exclude women. Redefine what leadership looks like and ensure it is role modelled positively from the top.
  4. Identify and address pipeline leaks: Use quantitative and qualitative exit data to understand and correct pipeline issues. Monitor your promotion and compensation gaps, as well as your workplace culture, to identify factors that may lead to women and marginalised genders self-selecting out of their careers.
  5. Implement gender proportionality and gender balance targets: Introduce gender proportionality in your pipelining efforts, ensuring that recruitment teams, panels, and talent committees are gender balanced.
  6. Mitigate biases: Improve recruitment and talent management processes by introducing objectivity and ensuring gender ratios at various stages of recruitment. Avoid relying on the ‘Great Man’ leadership theory to inform definitions of successful leadership and talent framework. Be conscious of how women are often penalised if displaying traditionally male leadership traits like assertiveness.
  7. Exercise Caution in Business Restructures: While restructures can offer valuable opportunities to improve gender balance in leadership, they often have the opposite effect due to entrenched recruitment biases. To counter this, include a gender impact assessment as part of any restructuring plan to mitigate potential regressions in gender representation.
  8. Establish executive sponsorship: Foster mentorship and sponsorship opportunities for women and marginalised genders to enhance their visibility and career advancement.
  9. Train hiring managers and talent committees: Provide training on inclusive recruitment practices and the link between gender-balanced leadership and team performance.
  10. Understand your industry pipeline: Before introducing strategies, assess the specifics of your pipeline. For example, in law, there may be sufficient graduates, but a significant drop-off occurs at mid-management. Conversely, STEM fields often face a smaller supply from early education, necessitating targeted recruitment strategies.
  11. Promote flexible work arrangements: Encourage flexible work policies to help retain talented women, particularly those who have additional demands on their time outside of work.
  12. Monitor Progress: Establish metrics to track the representation of women in leadership roles and assess the effectiveness of implemented strategies, adjusting policies based on findings for continuous improvement.

Furthermore, by examining two main broader types of succession challenges typologies – gender-balanced professions with a gender imbalance in leadership, such as mid management drop-off like in Finance and Law, and low supply at entry-level, like STEM – we can lay out another set of nuanced and targeted strategies:

  1. Gender-balanced professions with a broken rung and mid management drop-off: The case of law
  • Establish Mentorship and Sponsorship Schemes: Law firms for example should implement structured mentorship and sponsorship programmes connecting junior women with senior leaders, ensuring equitable access to career advancement.
  • Implement Clear Promotion Criteria: Develop transparent criteria for promotions and leadership roles, regularly communicating them to all employees to enhance accountability, improve objectivity and minimise gender bias.
  • Think about executive parents not only working parents: Encourage flexible work policies and normalise these to develop an executive pipeline of women. Particularly in a demanding environment that poses challenges to commitments outside of work. This includes adding flexibility to executive job roles design.
  • Consider license to hire/promote training: Mandatory training sessions on implicit bias and inclusive leadership should be held for hiring managers, especially those in talent review committees. This will help create a more equitable environment and reduce gender-based biases in promotion.
  1. Gender-imbalanced professions with leadership imbalance and low supply at entry-level: The Case of STEM
  • Focus on inclusive recruitment processes, particularly for external hires: Actively attract women in STEM by using gender-neutral language in job descriptions, moving beyond traditional masculine traits as desirable or essential and expanding outreach to women’s networks and educational institutions, being transparent in relation to pay and embedding flexibility in job design as default.
  • Review your gender value proposition: To attract and retain the limited number of women in the industry until the pipeline becomes more balanced, you need to stay ahead of your competitors. Ensure you offer significant benefits for women and clearly communicate your gender-inclusive workplace culture externally. Additionally, consider signing up for pledges, charters, and rankings. These actions will help hold your stakeholders accountable for making and sustaining meaningful changes.
  • Support STEM education for women: Collaborate with educational institutions to promote programmes encouraging young women to pursue STEM careers through scholarships and internships.
  • Acceleration leadership programmes for women: Develop targeted training programmes to accelerate women into leadership roles, focusing on negotiation, networking, and visibility opportunities.

Ready to accelerate gender equality in your organisation? Shape Talent is an award-winning gender equity consulting firm with a vision to accelerate gender equality in business and beyond. Contact us today to explore how we can support your gender equity initiatives.

Helena Wacko is an Equity, Diversity & Inclusion Researcher at Shape Talent, the equity, diversity and inclusion experts for complex multinational organisations who are serious about gender equality – and what it can achieve for their business.

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References

  1. https://www.publicappointmentsni.org/files/publicappointmentsni/media-files/Gender%20diversity%20and%20corporate%20performance%20-%20Credit%20Suisse%20Research%20Institute%20August%202012.pdf
  2. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2729348
  3. https://www.cloverpop.com/hacking-diversity-with-inclusive-decision-making-white-paper
  4. https://press.spglobal.com/2019-10-16-S-P-Global-Releases-When-Women-Lead-Firms-Win
  5. https://www.bcg.com/publications/2017/people-organization-leadership-talent-innovation-through-diversity-mix-that-matters
  6. https://www.calpers.ca.gov/docs/diversity-forum-credit-suisse-report-2015.pdf
  7. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace#/
  8. https://www.accenture.com/in-en/about/inclusion-diversity/vaahini-women-succession-planning
  9. https://www.managementtoday.co.uk/black-female-leaders-career-focused-risks/indepth/article/1875261
  10. https://www.hks.harvard.edu/centers/mrcbg/programs/growthpolicy/achieving-gender-balance-all-levels-your-company#:~:text=To%20address%20this%20challenge%2C%20the,the%20level%20immediately%20below%20it.
  11. Edwards, R., Guzzo, R., Jackson, C., Knoepflmacher, A., & Nalbantian, H. (2020). Let’s get real about equality: When women thrive 2020 global report
  12. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace#/
  13. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace#/
  14. https://shapetalent.com/wp-content/uploads/2021/11/Three-Barriers-Whitepaper-2nd-Ed-FINAL.pdf
  15. https://www.bcg.com/publications/2017/people-organization-leadership-change-dispelling-the-myths-of-the-gender-ambition-gap
  16. https://www.bcg.com/publications/2017/people-organization-leadership-change-dispelling-the-myths-of-the-gender-ambition-gap
  17. file:///Users/helenawacko/Downloads/s40461-016-0027-y.pdf
  18. ]https://www.spencerstuart.com/-/media/2022/october/acceleratingwomenapac/acceleratingwomenapac-oct2022.pdf
  19. https://www.cambridge.org/core/services/aop-cambridge-core/content/view/8865503038A92830047B4DB0481787A1/S0003055420000404a.pdf/womens-representation-and-the-gendered-pipeline-to-power.pdf
  20. https://hbr.org/2021/11/achieving-gender-balance-at-all-levels-of-your-company
  21. https://www.spencerstuart.com/-/media/2022/october/acceleratingwomenapac/acceleratingwomenapac-oct2022.pdf
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