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Recent news that Virginia Rometty will become the first female chief executive of IBM, and separate debate about country quotas for women’s representation on boards, have sparked a renewed dialogue on what it will take to catapult more women to the upper ranks of companies.
If we want to pick up the pace of women’s advancement, increasing the number of women MBAs would level the playing field in business globally. In countries including the US, UK, Germany, China, India and Japan, the percentage of female board directors ranges from 16 per cent in the US to less than 1 per cent in Japan. Women’s representation in the C-suite is also abominably low. In the US, there are currently only 16 women chief executives in the Fortune 500, despite women’s high workforce participation and education, including advanced degrees.
Research has shown there are three key areas of difference between women and men that contribute to gender inequity in business: pay; expectations and confidence; and mentors and sponsors. The MBA helps to address all three by providing women with the skill sets, confidence and credentials to be successful, key insights on salary negotiation and a strong network to build mentor and sponsor relationships.
While it is not necessary to have an MBA to become a chief executive, 42 per cent of Fortune 100 chief executives have an MBA or master’s degree in finance or economics. Women’s enrolment in MBA programmes in the past decade has climbed – from 26 per cent to 31 per cent on average across US and European schools, although some schools have made large increases this year.
The Forte Foundation was formed 10 years ago after groundbreaking research found that while both sexes equally pursue law and medical degrees, there was a significant gender gap in pursuing an MBA.
It is possible to reach the figure of 50/50, but many obstacles remain: young women’s understanding of business as a career; lack of access to female business role models who recommend business school to women; and inadequate planning during undergraduate years when women need an internship, leadership experience, business coursework and a strong GMAT score to lay the groundwork to get into business school.
Beyond college, women in their 20s face several key decision points around starting a family and moving to pursue a full-time MBA. Women are more risk averse and likely to stay close to home for their education and future employment, and are more willing to sacrifice their career prospects for those of their significant other.
A number of things could be done to influence these various inflection points in a woman’s pre-MBA career path: educating and motivating women to pursue internships and majors beyond liberal arts, educating campus advisers to relay the value of an MBA to women, and steering women to resources to help them plan their college experience to better prepare for career success. Companies and organisations could offer financial incentives and support to women to relocate with their family, or significant other, to pursue a full-time MBA.
We also need to raise awareness of the impact women can make on society, culture, the environment and the economy through their business career and emphasise research that demonstrates companies with more women in senior leadership have better bottom line performance, corporate governance and risk management.
And instead of comparing women with men in business, we might compare women with other women. What is interesting is a comparison of salary, career advancement and career satisfaction for women with undergraduate degrees versus an MBA. Figures from the Graduate Management Admission Council 2010 show that women significantly benefit from an MBA, regardless of industry, experience, geography, or other variables. Encouraging women to pursue an MBA benefits their careers and holds the key to opening doors for women in the C-suite and on boards.
Elissa Ellis Sangster is executive director of the Forte Foundation.