Is gender parity in corporate business leadership a possibility or a pipe dream? An MBA may hold the answer.
When it comes to gender equity, the numbers aren’t pretty: Women working full time still earn 81 cents on the dollar compared with their male counterparts according to US Bureau of Labor Statistics. According to Catalyst, only 4.2 per cent of Fortune 500 chief executives are women and only 17.3 per cent of board directors in the UK are women, followed by even smaller numbers in the US, Germany, Canada, China and Japan.
An MBA may help level the playing field. Forté Foundation found that an MBA could boost a woman’s lifetime earning potential by $3m. In a survey of 2012 graduates, the Graduate Management Admission Council, which administers the GMAT business school entrance exam, found that women reported salary increases of 70 per cent on average over their pre-degree salary – comparable with men’s increases. Past research by executive search firm Spencer Stuart notes that 39 per cent of S&P 500 chief executives have an MBA. Also in 2011 42 of the chief executives of Fortune 100 companies had an MBA, more than any other advanced degree.
Earning an MBA can also open up additional career options for women, who are more likely to switch jobs than men. Women hold an average of eight jobs over the course of a career, vs seven for men, according to an October survey by Citi and LinkedIn.
If business school is such a good proposition for women, what’s the catch? Not enough women are attending. Each year Forté researches and monitors female MBA enrolment at its partnering institutions, the leading business schools around the world. In the last decade the number of women students has increased, but only from about 28 per cent to 34 per cent. We still have a long way to go to reach gender equity.
A multi-targeted effort is needed to encourage women to consider an MBA and a career in business. We must educate women earlier in the pipeline to consider studying for an MBA, using, among others, the following approaches:
● Enhance early exposure to business careers. Women are less likely to pursue MBAs after other life bonds are cemented, whether that means getting married or having children. The earlier women know about the benefits of an MBA, the more likely they are to incorporate it into their plans. Events such as Forté’s College Leadership Launch for Women give female students from all disciplines the chance to explore career opportunities they never knew existed.
● Encourage women to major in business at the undergraduate level. Fewer women are pursuing undergraduate degrees in business. Annual surveys by the UCLA Higher Education Research Institute found that the percentage of women among college freshmen planning to major in business was 39 per cent in 2012, down from 42 per cent in 2006. Yet business disciplines experienced the largest increase in overall starting salaries for college graduates, according to a recent survey by the National Association of Colleges and Employers, climbing 7.9 per cent. NACE also found that after engineering majors, business graduates had the highest starting salaries.
● Show the journey and provide a road map. We’ve found that young women are more likely to be motivated by stories of senior women who talk about their journey as well as their destination. Forté’s Career Gal Road Trip allows users to make virtual work/life decisions including leaving the workforce to pursue an MBA, starting a family and entering various fields of business based on different college majors. Each decision will ultimately lead to a video segment of a successful woman in business who has made similar choices. Planning is essential. Companies create five-year plans. We need to encourage women to do the same to envisage the next steps in their career and to create a path to get there.
● Enhance flexibility initiatives. Flexibility in the workplace has been seen as primarily a women’s issue, but that is changing as men, too, see the need to balance their personal and professional lives. Providing flexible hours is becoming more essential in employee retention, which in turn affects employees’ ability to advance. Unfortunately, some top companies have been backpedalling on telecommuting and other flexibility initiatives.
● Encourage sponsorship/mentoring. Mentors are no longer sufficient; women need sponsors. Sponsors differ from mentors in that they not only offer advice but also act as advocates for an employee’s promotion. And men as well as women need to become sponsors for up-and-coming women according to Elisabeth Kelan, an associate professor at King’s College London. In her book Rising Stars: Developing Millennial Women as Leaders, she states; “Men are often powerful allies in driving the gender-change agenda forward, and by excluding them from women’s networks, the issue of gender is positioned as something that only concerns women and not men”. There are some efforts, such as the CEO Champions, a group of chief executives and other C-level executives who are personally committed to promoting women’s leadership within their organisations, but such initiatives are far too rare.
Statistic after statistic show that women are good for business, but business is lagging behind in returning the favour. While not a magic bullet, an MBA can boost earning potential and open up a broad range of opportunities for women. We just need to make sure that they get the memo.
Elissa Ellis Sangster is executive director of the Forté Foundation.