2005 Census Fortune 500 Women Corporate Officers

10-Year Anniversary

2005 Catalyst Census of Women Corporate Officers and Top

Earners of the Fortune 500

Ten Years Later:

Limited Progress, Challenges Persist

ABOUT CATALYSTCatalyst is the leading research and advisory organization working with businesses and the professions to

build inclusive environments and expand opportunities for women at work. As an independent, nonprofit

membership organization, Catalyst conducts research on all aspects of womens career advancement and

provides strategic and web-based consulting services globally. With the support and confidence of member

corporations and firms, Catalyst remains connected to business and its changing needs. In addition, Catalyst

honors exemplary business initiatives that promote womens leadership with the annual Catalyst Award. With

offices in New York, San Jose, and Toronto, Catalyst is consistently ranked No. 1 among U.S. nonprofits focused

on womens issues by The American Institute of Philanthropy.

2005 Catalyst Census of WomenCorporate Officers and Top Earners of the

Fortune 500

Sponsors: DuPont

Heidrick & Struggles

2006 by CATALYSTNEW YORK 120 Wall Street, 5th Floor, New York, NY 10005-3904; (212) 514-7600; (212) 514-8470 fax

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email: [email protected]; www.catalyst.org

Unauthorized reproduction of this publication or any part thereof is prohibited.

Catalyst Publication Code D43; ISBN#0-89584-261-0

The 2005 Catalyst Census of Corporate Officers and Top Earners of the Fortune

500 marks the tenth year Catalyst has tracked women in Fortune 500 corporate

officer positions. While we celebrate this milestone, we find little to celebrate in

the data. Our Census demonstrates that between 2002 and 2005, the

percentage of corporate officer positions held by women increased by a total of

just 0.7 percentage points to 16.4 percent. This rate of increase is significantly

lower than we have seen in previous years, and it is echoed in equally low

increases in all other data we collected. In other words, progress has almost come to a standstill.

This standstill reveals that the vast majority of Fortune 500 companies have yet to understand the

compelling business case for diversity or to take meaningful actions to address it. We find this particularly

surprising since the economic impact of diversity in leadership has become increasingly evident as U.S.

businesses expand into new markets, cultures, and workforces across the United States and around the

world.

In this report, we describe many of the issues that support the business case and show corporate leaders

what they can do to make change in their organizations. As usual, we provide evidence in the form of data

from our rigorous Census of Fortune 500 corporate leadership. This year, however, we have taken several

new steps, including applying a new, more consistent definition of corporate officer, delving more deeply

into the multiple and intersecting effects of race/ethnicity and gender on access to top corporate positions,

exploring industry effects, and interviewing women corporate officers from companies that have shown a

sustained commitment to gender diversity in corporate leadership.

We have also added Viewpoints at the end of each chapter that draw conclusions beyond the data

examined in this report. These conclusions are based on other Catalyst research and our years of

experience working with diversity and inclusion in the workplace. They are meant to provide explanations

and answers to some of the questions raised by the research and to highlight factors that we believe have

contributed to the findings.

We hope the data presented here, the issues raised, and the conclusions we have drawn provide a clear

and cogent call to action to those who have the power to drive positive change for women and business.

With your leadership, businesses can break the standstill and reap the extraordinary benefits of diversity.

Ilene H. Lang

President

Catalyst

FOREWORD

Introduction and Key Findings 2

Chapter 1: Women Corporate Officers of the Fortune 500 6

Chapter 2: Access to Power 13

Chapter 3: Intersections of Race/Ethnicity and Gender 19

Chapter 4: Women Corporate OfficersDoes Fortune 500 Rank or Industry Matter? 24

Chapter 5: Voices of ExperienceInterviews with Women Corporate Officers 29

Chapter 6: Conclusions and Call to Action 36

Acknowledgments 40

Appendix 1: Methodology 41

Appendix 2: Titles of Women Corporate Officers, by Company with Fortune 500 Rank 43

Appendix 3: Number and Percentage of Women Corporate Officers, Ranked by 58

Company Revenue

Appendix 4: Fortune 500 Industries, Ranked by Percentage of Women Corporate 63

Officers

Appendix 5: Number and Percentage of Women Corporate Officers, by Fortune 500 65

Industry with Company

Appendix 6: Number and Percentage of Women Corporate Officers, by SIC Industry 69

with Fortune 500 Industry

Appendix 7: Number and Percentage of Women Corporate Officers, by State with 81

Company

Appendix 8: States, Ranked by Percentage of Women Corporate Officers 85

Appendix 9: Fortune 500 Companies with At Least One Top-Earning Woman Corporate 86

Officer: 122

Addendum Notes 89

Also by Catalyst 90

Catalyst Board of Directors

TABLE OF CONTENTS

1 For companies that verified, industries that lost corporate officers between 2002 and 2005 were computer and data services, diversified financials,hotels, insurance, mail, package, and freight delivery services, and medical products. Industries that gained corporate officers were food services,transportation, and publishing.

DEFINITION OF TERMS USED IN THIS REPORT

Corporate Officer: This year, for the first time, we restricted our Census to only those corporate

executives who were board-elected or board-appointed. In past years, through our verification

process, we allowed companies to self-define their corporate officers, which contributed to

inconsistencies across companies. By imposing a stricter definition of corporate officers, our goal was

to standardize data across companies and over time.

The total number of corporate officers fell 20.5 percent from 2002 to 2005.To assess whether our new

definition of corporate officers was responsible for this decline, we examined whether there was an

overall fall in the number of corporate officers reported between 2002 and 2005. We compared only

those companies that were in the Fortune 500 in both 2002 and 2005 and also verified data in both

years. Limiting the analysis to companies present in both 2002 and 2005 ensured that the decrease

in number of corporate officers was not attributable to companies new to the Fortune 500 ranking in

2005, or those 2002 companies that were no longer ranked. Restricting the analysis further to only

those companies that verified in both years allowed us to see if the verification process led to changes

in the numbers: If the change in the definition of corporate officer had driven the fall in the total

number of corporate officers counted, then this decline would have occurred for companies across all

industries and Fortune ranks.

Data analysis showed that the decline in the number of corporate officers between 2002 and 2005

was industry- and rank-specific. In particular, the top 300 companies lost corporate officers, while the

bottom 200 companies gained corporate officers. Furthermore, some industries showed an increase

in the number of corporate officers, while others saw a decline.1

Top Earner: Companies are required to publicly report their five top earners. In the cases in which a top

earner was not also a corporate officer, he or she was not counted.

Clout: Corporate officers with clout hold the highest titles at a company. The titles that Catalyst

considers clout are CEO, Chair, Vice Chair, President, COO, Senior Executive Vice President (SEVP), and

Executive Vice President (EVP).

Line: Line officers are responsible for a companys profits and losses. We determined if a corporate

officer was responsible for profits and losses based on the officers title and functional area.

Staff: Staff officers are responsible for the auxiliary functioning of the business. We determined if a

corporate officer was responsible for auxiliary functioning based on the officers title and functional

area.

2005 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 500 1

THE BUSINESS CASE

Catalyst counts women corporate officers and top earners of the Fortune 500 because we believe that

diversity in the highest echelons of corporate leadership is not only good for women, but also good for

business.

Our study The Bottom Line: Connecting Corporate Performance and Gender Diversity has shown that the

Fortune 500 companies with the highest percentages of women corporate officers experienced, on

average, a 35.1 percent higher return on equity (ROE) and 34.0 percent higher total return to shareholders

(TRS) than did those with the lowest percentages of women corporate officers.2 While this study did not

prove causation, it showed a strong correlation between companies that have diversified their senior

management and companies that performed well financially.

2005 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 5002

2 Catalyst, The Bottom Line: Connecting Corporate Performance and Gender Diversity (2004).

INTRODUCTION AND KEY FINDINGS

KEY FINDINGS

Women Corporate Officers and Top Earners

u In 2005, women held 16.4 percent of corporate officer positions, up just 0.7 percentage points from

2002.

u Women held 6.4 percent of top earner positions, up 1.2 percentage points from 2002.

u At the estimated growth trend for the past ten years (0.82 percentage points per year), it will take 40

years for women to reach parity with men in corporate officer ranks.

Women of Color

u Women of color held only 1.7 percent of corporate officer positions.

u Women of color were 1.0 percent of all Fortune 500 top earners.

Women in Line, Staff, and Clout Positions

uWomen were almost two and one-half times as likely to hold staff positions (71 percent) as they were

to hold line positions (29 percent).

u Women held 9.4 percent of clout titles, up from 7.9 percent in 2002.

u In 2005, eight Fortune 500 companies were led by a woman CEO, up from six in 2002.

Women Corporate Officers, by Company Rank and Industry

uThe percentage of women in any category measured did not vary systematically with Fortune 500 rank.

uWomen had greater percentages of corporate officer positions in industries where women were 49

percent or more of the total workforce (finance, insurance, real estate, retail trade, and services).

Furthermore, as customers, employees, and suppliers now come from all parts of the world, and the

demographics of the U.S. marketplace and employee base changes, successful companies need to expand

their traditional leadership to include people who can relate to the diversity of the global marketplace. A

diverse leadership team will also help companies attract more diverse employees and remove barriers to

their advancement. Companies that can proactively and successfully harness all of their available talent

will sustain significant advantages over competitors with more traditional leadership teams.

Research suggests that companies that recruit, develop, and advance diverse employees, including women,

make better decisions, produce more marketable products, and retain several key business advantages

over more homogeneous companies.3 Furthermore, we contend that companies that achieve diversity and

manage it well attain better financial results than other companies.4

THE CENSUS RESULTS

Counting the number of women in corporate officer and top earner positions allows us to track the

progress that the largest public companies headquartered in the United States have made in diversifying

their leadership. Over the last decade, many organizations have recognized the need to diversify their

employee base and leadership. Many have hired Chief Diversity Officers and implemented detailed

diversity and inclusion strategies. We applaud those companies.

Nevertheless, our 2005 Census shows that, in the last three years, growth in the percentage of corporate

officer positions held by women slowed dramatically. In 2005, women held 16.4 percent of corporate

officer positions, only 0.7 percentage points more than they did in 2002. Furthermore, the percentage of

corporate officer positions held by women of color stagnated at 1.7 percent.

The failure of Fortune 500 companies to add womenespecially women of colorto their corporate

leadership in the last three years highlights a startling gap between rhetoric and reality. These findings

seem to indicate that few companies have fully grasped how integral diversity is to attaining business

objectives in the current global business environment. We urge companies across the Fortune 500

spectrum to reconsider the business case for diversity and reassess their diversity goals and strategies.


3 Rosabeth Moss-Kanter, The Change Masters: Innovations and Entrepreneurship in the American Corporation (New York: Simon and Shuster, 1983);Sarah Moore, Understanding and Managing Diversity Among Groups at Work: Key Issues for Organizational Training and Development, Journal ofEuropean Industrial Training, vol. 23, no. 4/5 (1999): p. 208-217; Poppy Lauretta McLeod, Sharon A. Lobel, and Taylor H. Cox, Ethnic Diversity andCreativity in Small Groups, Small Group Research, vol. 27, no. 2 (May 1996): p. 248-264; and Gail Robinson and Kathleen Dechant, Building aBusiness Case for Diversity, Academy of Management Executive, vol. 11, no. 3 (August 1997): p. 21-31.

4 Catalyst, The Bottom Line: Connecting Corporate Performance and Gender Diversity (2004).

WHY IS PROGRESS SO SLOW?

Through our research, we know that equal numbers of women and men senior managers aspire to top

positions, regardless of whether or not they have children under the age of 18 living at home with them.

We know that women and men employ the same strategies for business success. We know that work-life

quality issues affect men as much as they affect women.5 At the same time, women continue to surpass

men in higher education and women hold more than one-half of management and professional positions.

And yet, women struggle more than men as they climb the corporate ladder.

Why? Our research has found that women face three significant barriers that men rarely face: gender-

based stereotyping, exclusion from informal networks, and a lack of role models. These obstacles combine

to restrain women from top positions by pigeonholing their talents, restricting access to essential

information, and discouraging their ambitions.

Women will only advance to the highest positions in large numbers when these barriers are removed from

their career paths. We encourage all organizations to examine the workplace policies, practices, and norms

that keep these barriers in place, and then work to change them.

HOW CAN COMPANIES IMPROVE DIVERSITY?

In 2005, the average Fortune 500 company had 22 corporate officers; 3.6 of them were women. Fully 75

percent of these companies did not have any women corporate officers earning one of the five highest

salaries at their company. How can companies go beyond this minimal level of diversity and reach the

numbers that will show genuine commitment to a variety of perspectives, ideas, and backgrounds?

CEOs and top leadership must recognize the strong business case for integrating diversity into a global

business strategy. Once the business case has been defined, appropriate initiatives and measures can be

implemented to achieve the goals set out by the business case.

CEOs must then communicate the business case to management, board members, shareholders, business

partners and suppliers, and employees. They must demand full commitment and accountability from all.

They must implement cultural changes that will encourage managers to recruit, develop, promote, and

track diverse talent. They must celebrate diversity as a better way to conduct business.

2005 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 50045 Catalyst, Women and Men in U.S. Corporate Leadership: Same Workplace, Different Realities? (2004).

PROGRESS IS NOT ASSURED

This Census shows progress for women cannot be taken for granted. The dramatic decline in growth is

highly worrisome and could indicate that many companies have succumbed to the comforts of tokenism.

Gender diversity is not achieved when there are almost five men corporate officers for every woman.

Companies need to redouble their efforts to enforce a meritocracy that is blind to gender and other

differences that unfairly advantage certain groups over others. When employees know they will be judged

solely on their merits and resultsnot stereotypic assumptions based on their appearancethey will all

make greater efforts to succeed. As a result, companies themselves will be more successful.

Companies therefore have a responsibility to their employees, shareholders, customers, suppliersand

societyto look for and support the most talented workforce possible, regardless of gender, color, or any

other difference from the historical norm. The data in this report argue for a vigorous re-evaluation of

current diversity goals, strategies, and outcomes. Without such action, it seems probable that growth in

gender diversity will continue to stall and both organizations and women will lose.


WOMEN CORPORATE OFFICERS

In 2005, women held 1,783 (16.4 percent) of the 10,873 corporate officer positions at Fortune 500

companies.6

Figure 1: Percentage of Fortune 500 Corporate Officer Positions Held by

Women, 2005


6 This year, Catalyst used a new, more precise definition of corporate officer. In previous years, Catalyst allowed companies to define who theircorporate officers were. This year, Catalyst only counted corporate officers who were either board-elected or board-appointed. Bias tests showedthat the resulting change in definition did not appreciably alter the numbers of women and total corporate officers identified. See Appendix 1 orpage 1 for more information.

CHAPTER 1: WOMEN CORPORATE OFFICERS OF THEFORTUNE 500

KEY FINDINGS

u In 2005, women held 16.4 percent of corporate officer positions, up just 0.7 percentage points from

2002.

u In the last three years, average growth in the percentage of corporate officer positions held by

women fell dramatically to 0.23 percentage points per year, the lowest yearly gain in the past ten

years.

u At the ten-year estimated growth trend of 0.82 percentage points per year, it will take 40 years for

the number of women corporate officers to equal the number of men corporate officers.

uWomen of color held only 1.7 percent of corporate officer positions.

uWomen held 6.4 percent of the top earner positions, up 1.2 percentage points from 2002.

83.6%(N=9,090/10,873)

16.4%(N=1,783/10,873)

Women Men

In 1995, when Catalyst first collected census data, women held 8.7 percent of all the corporate officer

positions.

Figure 2: Percentage of Fortune 500 Corporate Officer Positions Held by Women, 1995-20057

Between 1995 and 2005, the percentage of corporate officer positions held by women grew at an

estimated trend of .82 percentage points per year.8 Higher-than-average growth occurred between 1995

and 1996 and between 2000 and 2002. Changes in growth did not appear to be related to changes in the

business cycle. During the last recession, between March, 2001, and November, 2001, the average yearly

growth in the percentage of corporate officer positions held by women was an uncharacteristically strong

1.6 percentage points.9

Table 1: Change in Percentage of Corporate Officer Positions Held by Women, 1995-2005


Year

8.7%

10.0%

10.6%

11.2%

11.9%

12.5%

N/A

15.7%

N/A

N/A

16.4%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Percentage of Corporate OfficerPositions Held by Women

1.3

0.6

0.6

0.7

0.6

1.6*

1.6*

0.23**

0.23**

0.23**

Change in Percentage

*Change in percentage averaged over two years (15.7-12.5)/2**Change in percentage averaged over three years (16.4-15.7)/3

8.7%

35%

30%

25%

20%

15%

10%

5%

0%1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

10.0% 10.6% 11.2%11.9% 12.5%

N/A

15.7%

N/A N/A

16.4%

7 In 2001, 2003, and 2004, Catalyst did not conduct a census of corporate officers and top earners.8 Derived from the slope of the percentage of women corporate officers plotted against the yearly time trend.9 In 2001, 2003, and 2004, Catalyst did not conduct a census of corporate officers and top earners.

At the estimated growth trend for the last ten years (0.82 percentage points per year), it will take 40 years

for women corporate officers to match men.10

Figure 3: Projected Growth of Women Corporate Officers, 1995 to 2046

Concurrent with the minor increase in the percentage of corporate officer positions held by women was a

steep decline in the number of total corporate officersfrom 13,673 in 2002 to 10,873 in 2005. While the

total number of corporate officers fell 20.5 percent in the last three years, the total number of women

corporate officers fell by a smaller 16.7 percent in the same time period.

Table 2: Number and Percentage of Women and Men Corporate Officers, 1995-2005


1990 2000 2010 2020 2030 2040 2050

60%

50%

40%

30%

20%

10%

0%

.82 Growth Rate

Year

11,241

13,013

11,101

11,022

11,681

12,945

N/A

13,673

N/A

N/A

10,873

15.8%

-14.7%

-0.7%

6.0%

10.8%

N/A

5.6%

N/A

N/A

-20.5%

979

1,302

1,173

1,234

1,386

1,622

N/A

2,140

N/A

N/A

1,783

33.0%

-9.9%

5.2%

12.3%

17.0%

N/A

31.9%

N/A

N/A

-16.7%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Total Number

Corporate

Officers

Percentage

Change

Corporate Officers

Total Number

Women Corporate

Officers

Percentage Change

Women Corporate

Officers

Total Number Men

Corporate Officers

Percentage

Change Men

Corporate Officers

10,262

11,711

9,928

9,788

10,295

11,323

N/A

11,533

N/A

N/A

9,090

14.1%

-15.2%

-1.4%

5.2%

10.0%

N/A

1.9%

N/A

N/A

-21.2%

10 Derived from the slope of the percentage of women corporate officers plotted against the yearly time trend.

The average Fortune 500 company had 21.8 corporate officers and 3.6 women corporate officers. As Figure

4 shows, however, more than one-half of the Fortune 500 had fewer than three women corporate officers.

Figure 4: Number of Companies with Zero, One, Two, and Three or

More Women Corporate Officers, 2002 and 2005

WOMEN OF COLOR CORPORATE OFFICERS

In 2005, women of color held 1.7 percent of all corporate officer positions at the 327 companies for which

we had race/ethnicity and gender data.11

Figure 5: Percentage of Fortune 500 Corporate Officer Positions

Held by Women of Color, 2005

African-American women held 5.9 percent of all women corporate officer positions, Asian-American

women held 2.5 percent, Latinas held 2.1 percent, white women held 89.0 percent, and all other

racial/ethnic groups held less than 1 percent.12


Zero One Two Three or More

2002 2005

11 Data on race/ethnicity was not publicly available. Catalyst gathered this information from 260 companies that agreed to provide it. Data wascollected on men and women corporate officers of the following racial/ethnic groups: White, African-American, Hispanic, Asian-American, NativeAmerican, and Other. To calculate the percentages of women corporate officers of color, we included the 67 Fortune 500 companies that had nowomen corporate officers for a total of 327 companies used in this analysis.

12 To gather race/ethnicity data, Catalyst asked companies to provide the total number of women and total number of men corporate officers byrace/ethnic identity by the following categories: White, African-American, Hispanic, Asian-American, and Other.

250

200

150

100

50

0

71 67

96 98 95 99

238 236

98.3%(N=6,484/6,599)

1.7%(N=115/6,599)

All Other Corporate OfficersWomen of Color Corporate Officers

Figure 6: Race/Ethnicity of Non-White Women Corporate Officers, 2005

TOP EARNERS

Research documents that men executives continue to earn higher salaries than women executives.13 This

Census highlights the gender salary gap by showing that women corporate officers were far less likely than

men corporate officers to earn one of the five highest salaries at their companies. In fact, in 2005, only 145

(6.4 percent) out of 2,250 corporate officer top earners were women.14

Figure 7: Percentage of Fortune 500 Top Earner Positions Held

by Women Corporate Officers, 2005

In 2005, 378 companies had no women corporate officers among their top five earners, down from 393 in

2002. In 2005, the number of companies with at least one woman top earner was 100, up 3 from 2002.

The largest increase came in the number of companies with two women top earners, which grew from nine

companies to 21 between 2002 and 2005. However, just like in 2002, there was only one company with

three or more top earners who were women.15


7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

5.9%

2.5%2.1%

0.2% 0.3%

African-American

Asian-American

Latina NativeAmerican

Other

Perc

ent

ofA

llW

omen

Corp

orat

eO

ffic

ers

93.6%(N=2,105/2,250)

6.4%(N=145/2,250)

Women Men

13Marianne Bertrand and Kevin Hallock, The Gender Gap in Top Corporate Jobs, Industrial and Labor Relations Review, vol. 55, no. 1 (October 2001):p. 3-21. See also Robert G. Wood, Mary E. Corcoran, and Paul N. Courant, Pay Differences Among the Highly Paid: The Male-Female Earnings Gap inLawyers Salaries, Journal of Labor Economics, vol. 11, no. 3 (July 1993): p. 417-441.

14 Companies publicly report their top five earners. In cases where the top earner was not also a corporate officer, he or she was not included in ouranalysis. We counted 2,250 top earners who were corporate officers in 2005.

15 See Appendix 9 for a list of companies with at least one woman corporate officer top earner.

Figure 8: Number of Companies with Zero, One, Two, and Three or

More Women Top Earners, 2002 and 2005 NE 500 COMPANIES WITH WOMEN BOARD DIRECTORS

CATALYST VIEWPOINT

Steep Declines in Growth Are Troubling

Women are substantially underrepresented in top management positions in Fortune 500 companies. Given

womens education levels, expertise, experiences, and commitment to the labor force, we expected to see

women progressing to the top levels and salaries in much greater numbers.

u Women participate in the U.S. labor force in unprecedented numbers today.16

q In 2004, women earned more than 57 percent of all four-year college degrees.17

q In 2004, women earned 41.1 percent of master of business degrees.18

q In 2004, women earned 34.8 percent of M.B.A. degrees.19

q In 2005, 37.2 percent of managers were women.20

q In 2005, women made up 50.6 percent of the managerial and professional workforce.21

tThese women have the expertise and capability to move into corporate officer positions.

q More women are working than ever before: 59.3 percent in 2005.22

qMothers with young children are more likely to be in the labor force today than they were 20

years ago.23


2002 2005

450500

400

350300

250200

150

10050

0

393 378

97 100

9 1 121

Zero One Two Three or More

16 Bureau of Labor Statistics, Current Population Survey, Annual Averages (2006). The number of women in the labor force has increased more than50 percent in the last 25 years.

17 National Center for Education Statistics, Digest of Education Statistics, 2005 (2006).18 National Center for Education Statistics, Digest of Education Statistics, 2005 (2006).19 The Association to Advance Collegiate Schools of Business (AACSB), Overview of U.S. Business Schools, 2004-2005 (2006).20 Bureau of Labor Statistics, Current Population Survey, Annual Averages (2006).21 Bureau of Labor Statistics, Current Population Survey, Annual Averages (2006).22 Bureau of Labor Statistics, Current Population Survey, Annual Averages (2006).23 Bureau of Labor Statistics, Employment Characteristics of Families, (June 9, 2005); Bureau of Labor Statistics, Women in the Labor Force: A

Databook (May 2005).

With this level of representation at work, why are only 16.4 percent of corporate officers women?

u Catalyst research suggests that many stereotypes hold women back from top positions.24 Common

stereotypic perceptions include:

q Women lack ambition.

q Women dont have the right work experience.

q Women dont have the leadership skills.

q Women dont have the problem-solving skills.

q Women wont make the necessary sacrifices.

u Other barriers Catalyst research shows contributing to womens slow advancement include:25

q Lack of access to informal networks

q Lack of mentors

q Lack of access to influential colleagues

q Lack of role models

q Lack of stretch assignments

q Limited flexible work arrangements

u This Census highlights the impact that stereotypes and other barriers continue to have on women

in corporate America, and demonstrates the need for increased attention to the elimination of these

barriers.

q An organization with barriers is not a meritocracy.

q Barriers waste valuable talent.

q Few companies are taking full advantage of all their employee talent.


24 Catalyst, Women Take Care, Men Take Charge: Stereotyping of U.S. Business Leaders Exposed (2005). Catalyst, Connections that Count: TheInformal Networks of Women of Color in the United States (2006).

25 Catalyst, Women in U.S. Corporate Leadership: 2003 (2003); Catalyst, Women and Men in U.S. Corporate Leadership: Same Workplace, DifferentRealities? (2004).

WOMEN EXECUTIVES: IN LINE OR ON STAFF?

Occupational segregation by genderwomen and men working at different jobs, at different levels within

jobs, and in different industriesis a key and worldwide characteristic of employment.26 At every level of

work, within and across industries and places of employment, research suggests that men have greater

access to the best jobs.27 Once again, our Census shows that this gendered feature persists in the executive

hierarchy.

CEOs consistently tell Catalyst that line experience is essential to reaching the most senior levels of many

organizations. Corporate officers in line positions are responsible for an organizations profits and losses,

while those in staff positions support the auxiliary functioning of the business. In order to gauge gender

segregation in executive officer positions, Catalyst measured the number of women and men corporate

officers in line and staff positions.

In 2005, women held 10.6 percent of corporate officer line positions, while men held 89.4 percent of line

positions. This reflects a 0.7 percentage point increase for women from 2002. At the same time, women

held 21.1 percent of corporate officer staff positions, while men held 78.9 percent. These numbers also

reflect a 0.7 percentage point increase for women from 2002. Compared with their 16.4 percent share of

all corporate officer positions, women continue to be underrepresented in line positions and

overrepresented in staff positions.


26 International Labour Office, Key Indicators of the Labour Market (Geneva, Switzerland: International Labour Office, 2004).27 Augusto Lopez-Claros and Saadia Zahidi, Womens Empowerment: Measuring the Global Gender Gap (Geneva, Switzerland: World Economic

Forum, 2005).

KEY FINDINGS

u Women held 10.6 percent of line positions, up 0.7 percentage points from 2002.

u Women held 21.1 percent of staff positions, up 0.7 percentage points from 2002.

uWomen were almost two and one-half times as likely to hold staff positions (71 percent) as they were

to hold line positions (29 percent).

u Women held 9.4 percent of the highest executive titles, up from 7.9 percent in 2002.

u Eight companies in the Fortune 500 were led by a woman CEO, compared with six in 2002.

CHAPTER 2: ACCESS TO POWER

Figure 9: Percentage of Line and Staff Corporate Officer Positions Held

by Women, 2002 and 2005

While men corporate officers were only slightly more likely to hold staff positions (52 percent) than they

were to hold line positions (48 percent), women were almost two and one-half times as likely to hold staff

positions (71 percent) as they were to hold line positions (29 percent).

Figure 10: Percentage of Line and Staff Corporate Officer Positions, by

Gender, 2005

WHO HAS CLOUT IN THE FORTUNE 500?

Catalyst found occupational segregation even within the highest executive ranks, where we know both

women and men are highly motivated, skilled, and successful. Women were significantly less likely than

men to hold the highest executive titles, including: CEO, Chair,28 Vice Chair, President, COO, Senior

Executive Vice President (SEVP), and Executive Vice President (EVP).


28Chair: highest-ranking director in a corporations board of directors. Vice Chair: the second-ranking director in a corporations board of directors whoalso served as corporate officer.

Women Men

Staff 2002

Staff 2005

Line 2002

Line 2005

20.4% 79.6%

21.1% 78.9%

9.9% 90.1%

10.6% 89.4%

20% 40% 60% 80% 100%0%

71%

29%

52%

48%

Line Staff

100%

80%

60%

40%

20%

0Women Men

In 2005, women held only 9.4 percent of these highest corporate titles, up from 7.9 percent in 2002.

Figure 11: Percentage of Clout Titles Held by Women, 2005

Only eight Fortune 500 companies (1.6 percent) were led by women CEOs, up from six (1.2 percent) in

2002. However, in 2005, there were no Fortune 100 companies led by women CEOs, down from three in

2002.29

Table 3: Women CEOs as of March 31, 200530

From 2002 to 2005, the percentage of clout titles held by women rose from 7.9 to 9.4 percentage points,

an increase of 1.5 points. This was double the 0.7 percentage point increase of women corporate officers

from 15.7 percent to 16.4 percent during the same period.

This means that women entered the highest ranks of corporate leadership at a faster rate than they

entered the overall corporate officer pool. This could have occurred for two reasons. First, companies may

have recruited women from outside their companies directly into clout titles. Second, companies could

have moved women up the executive ranks internally and at the same time replenished their lower-level

executive ranks with proportionally fewer women corporate officers from either within or outside the firm.


29 The Fortune 100 women CEOs in 2002 were Carleton S. Fiorina of Hewlett-Packard Company (Fortune rank 28 in 2002); S. Marce Fuller of Mirant(Fortune rank 52 in 2002); and Patricia F. Russo of Lucent Technologies (Fortune rank 76 in 2002).

30 Eileen Scott resigned from Pathmark Stores on August 24, 2005; as of September 30, 2005, S. Marce Fuller was no longer CEO of Mirant as part ofthat companys reorganization; Brenda Barnes was named CEO of Sara Lee on February 10, 2005, but she did not officially become CEO until July3, 2005.

CompanyRank

Rite Aid

Xerox

Lucent Technologies

Avon Products

Reynolds American

Mirant

Golden West Financial

Pathmark Stores

128

132

247

278

321

424

435

467

Company Name

Mary F. Sammons

Anne M. Mulcahy

Patricia F. Russo

Andrea Jung

Susan M. Ivey

S. Marce Fuller

Marion O. Sandler

Eileen Scott

Name

2003

2001

2002

1999

2004

1999

1963

2002

Year WomanBecame CEO

Women Men

90.6%(N=2,159/2,383)

9.4%(N=224/2,383)

This trend extends back to 1997, when Catalyst first began to count clout titles. Between 1997 and 2005,

the percentage of clout titles held by women rose from 3.0 to 9.4 percent, or 6.4 percentage points. At the

same time, the percentage of women corporate officers increased from 10.6 to 16.4 percent, for an

increase of 5.8 points.

Table 4: Percentage of Clout Positions Held by Women and Men, 1997-2005

Although the data shows women moving into clout titles at a higher rate than into corporate officer

positions overall, even within clout titles occupational segregation is evident. Women held a higher

percentage of Senior Executive Vice President and Executive Vice President positions than they held of the

even more elite positions. At the same time, men held higher percentages of the highest titles than they

did of the lower titles.31

Overall, companies with higher percentages of women corporate officers also had higher percentages of

women in clout positions.32

16 2005 Catalyst Census of Women Board Directors of the Fortune 500

Year

1,728

2,184

2,249

2,488

N/A

2,412

N/A

N/A

2,383

1997

1998

1999

2000

2001

2002

2003

2004

2005

Total Number

Clout Title

Holders

51

83

114

154

N/A

191

N/A

N/A

224

Total Number

Women Clout

Title Holders

3.0%

3.8%

5.1%

6.2%

N/A

7.9%

N/A

N/A

9.4%

Women as a

Percentage of all Clout

Title Holders

1,677

2,101

2,135

2,334

N/A

2,221

N/A

N/A

2,159

Total Number Men

Clout Title Holders

97.0%

96.2%

94.9%

93.8%

N/A

92.1%

N/A

N/A

90.6%

Men as Percentage

of All Clout Title

Holders

31 In cases where an officer held more than one title (e.g., President and COO), only the highest title was counted.32Correlation coefficient between share of women corporate officers and share of women in clout positions was a positive and significant 0.487, which

means that every 1 standard deviation increase in the share of women corporate officers was associated with a 0.487 percentage point increase inthe share of women in clout positions.

Table 5: Percentage of Clout Positions Held by Women, by Title, 2002 and 2005

CATALYST VIEWPOINT

Occupational Segregation Persists

Throughout their careers, women are tracked into staff jobs that prevent them from acquiring the results

and knowledge that are necessary for the highest advancement and salaries.

uOccupational segregation, as evidenced by the line-staff gender data, reflects stereotypic

assumptions about:

q Womens work-life needs, desires, and capabilities

q Womens ambition

q Womens career choices

u These assumptions channel and dead-end women into staff positions.

q Whereas men may be promoted to staff positions to accumulate experience and network

capital before being promoted to higher line positions, women promoted into staff positions

are often left there without adequate and appropriate continued attention to career

development.

u Occupational segregation also contributes to the small number of women top earners.

q Women are less likely to be employed in higher-paying clout positions than men are.33

q When more women hold more line positions, there will be more women top earners.

u The more women corporate officers there are at a company, the greater the likelihood that women

will hold clout titles.

q When there are more women corporate officers, there will be more opportunity for diverse

hiring and promotion outcomes.


33Marianne Bertrand and Kevin Hallock, The Gender Gap in Top Corporate Jobs, Industrial and Labor Relations Review, vol. 55, no.1 (October 2001):p. 3-21.

2002

85

132

502

155

93

69

1,376

2,412

Chair Only

Vice Chair

CEO

President

COO

SEVP

EVP

Total Clout

Total NumberClout

Positions

2005

71

110

502

139

76

57

1,428

2,383

2002

0

3

6

7

3

12

160

191

2005

0

7

8

4

2

7

196

224

2002

0

2.3

1.2

4.5

3.2

17.4

11.6

7.9%

2005

0

6.4

1.6

2.9

2.6

12.3

13.7

9.4%

Number Womenin Clout Positions

Percentage CloutPositions Held by

Women

u To stay competitive, global companies need women in clout positions who can actively shape

company strategies.

q To achieve success, a companys talent pool at the top must reflect employees, customers,

and suppliers.

q Few companies have taken advantage of the opportunities diverse employees can provide.


WOMEN AND MEN OF COLOR CORPORATE OFFICERS

This year, for the first time, we more fully explored the multiple effects of race/ethnicity and gender by

counting men of color corporate officers in addition to women of color corporate officers. This new data

allowed us to assess the different impacts that race/ethnicity and gender may have on access to corporate

leadership positions. Because data on race/ethnicity was not publicly available, Catalyst gathered this

information from 260 companies that agreed to provide it. Data was collected on men and women

corporate officers of the following racial/ethnic groups: White, African-American, Hispanic, Asian-

American, Native American, and Other.34

At the 260 companies that verified race/ethnicity data, men of color held 6.4 percent of corporate officer

positions. African-American men held 2.6 percent of all corporate officer positions, Asian-American men

held 1.5 percent, and Latinos held 1.7 percent. In comparison, women of color at those 260 companies

held 2.0 percent of corporate officer positionsAfrican-American women held 1.1 percent; Asian-

American women held 0.4 percent, and Latinas held 0.4 percent.35


CHAPTER 3: INTERSECTIONS OF RACE/ETHNICITY ANDGENDER

KEY FINDINGS

uWomen of color held only 1.7 percent of all corporate officer positions at the 327 companies for which

we had race/ethnicity and gender data.

u Of the 195 Fortune 500 companies that verified race/ethnicity data in both 2002 and 2005, the

percentage of corporate officer positions held by women of color increased just 0.3 percentage points.

u Men of color held 6.4 percent of all corporate officer positions.

u Women of color corporate officers held just 1.0 percent of top earner positions.

34 To gather race/ethnicity data, Catalyst asked companies to provide the total number of women and total number of men corporate officers byracial/ethnic identity by the following categories: White, African-American, Hispanic, Asian-American, and Other.

35 Race/ethnicity analyses included only the 260 companies that verified race/ethnicity data. The totals include percentages for Native Americans andthose who did not identify a particular race (listed in Figure 12 as Other).

Figure 12: Race/Ethnicity of Women and Men Corporate Officers, 2005

For the 195 companies that verified race/ethnicity for our Censuses in both 2002 and 2005, the number of

women of color corporate officers grew by only 0.3 percentage points, from 1.8 percent in 2002 to 2.1

percent in 2005.36 More specifically, the percentage of African-American women corporate officers did not

change between 2002 and 2005, while the percentages of Asian-American and Latina women corporate

officers each rose 0.1 points.

Figure 13: Race/Ethnicity of Women Corporate Officers, 2002 and 2005


36For this time trend analysis, we used the 195 Fortune 500 companies that verified race/ethnicity data in both 2002 and 2005. In 2002, Catalyst didnot collect information on men of color.

Women Men

1.1%

2.6%

0.4%

1.5%

0.4%

1.7%

0.0%0.2%

0.1%

0.4%

African-American

Asian-American

Latina/o NativeAmerican

Other

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0%

2002 2005

African-AmericanWomen

Asian-AmericanWomen

Latinas Other Women Total Womenof Color

2.5%

2.0%

1.5%

1.0%

0.5%

0%

1.2%

0.4%0.3%

0.4%0.3%

0.1%0.0%

2.1%

1.8%

1.2%


WOMEN AND MEN OF COLOR IN THE WORKFORCE

In 2005, African-American women were 5.0 percent of the management and professional workforce,

Hispanic women were 3.3 percent, and Asian-American women were 2.6 percent.37 For African-American

and Asian-American women, these numbers were almost equal to the percentage of the total labor force

that these groups represent. For Latinas, however, the number was much lower.

This comparison shows us that for African-American and Asian-American women, barriers to corporate

officer ranks strengthen considerably at the transition from lower-level management jobs to executive

jobs. For Hispanic women, the barriers into management emerge at the entry to management positions.38

Men of color hold approximately 3 percent of managerial and professional workforce jobs across the three

major racial/ethnic groups.39 For African-American and Hispanic men, barriers to management positions

appear at lower-level management occupations. However, once African-American men are in

management, they are relatively well represented in corporate officer positions; Hispanic men continue to

face barriers as they attempt to ascend to the upper levels. Fewer barriers seem to appear for Asian-

American men until they reach the upper levels of management, at which point they stop advancing at

approximately the same rate as Hispanic men. In all of these cases, men are better represented at the

corporate officer level than are women.

Table 6: Women and Men of Color in the Workforce, 200540

Total Labor Force Management,Professional, and Related

Occupations

Corporate Officers

Women

African-American 6.0% 5.0% 1.1%

Asian-American 2.0% 2.6% 0.4%

Latina 5.2% 3.3% 0.4%

Men

African-American 5.4% 3.1% 2.6%

Asian-American 2.3% 3.3% 1.5%

Latino 8.0% 3.1% 1.7%

37Bureau of Labor Statistics, Current Population Survey, unpublished data (2006). Catalyst used the broader Bureau of Labor Statistics management,professional, and related occupations category to measure the percentage of women in the managerial workforce instead of the more narrowmanagement, business, and financial operations occupations because the former category includes both lawyers and accountants, which arepotential pipeline occupations to the executive level. Nevertheless, all women of color were still underrepresented when compared with thenarrower category, which does not include the woman-dominated teaching and nursing professions.

38Racial/ethnic differences in pre-labor market factors, such as education and family poverty, may underlie the occupational differences observed forLatinas.

39 Bureau of Labor Statistics, Current Population Survey, unpublished data (2006). African-American and Hispanic men were each 3.1 percent of themanagement and professional workforce, while Asian-American men were 3.3 percent. Men of all racial/ethnic groups, except white, were alsounderrepresented as corporate officers when compared with their percentage of the narrower management, business, and financial operationsoccupations.

40 Women and men of color labor force rates and management, professional, and related occupations rates are from the Bureau of Labor Statistics,Current Population Survey, Annual Averages and unpublished data (2006).

WOMEN AND MEN OF COLOR TOP EARNERS

Once in the corporate ranks, both women and men of color were much less likely than white women and

men to be top earners. At the 260 companies that verified race/ethnicity of top earners, women of color

held just 1.0 percent of top earner positions, while men of color held 4.1 percent of those positions.

Table 7: Race/Ethnicity and Gender of Top Earners, 2005


Race/Ethnicity

3

8

1

0

0

12

73

African-American

Asian-American

Latina/o

Native American

Other

Total People of Color

White

Number ofWomen

20

12

15

2

1

50

1,092

Number of Men

0.2%

0.7%

0.1%

0.0%

0.0%

1.0%

5.9%

Percentage ofWomen Top Earners

1.6%

1.0%

1.2%

0.2%

0.1%

4.1%

89.0%

Percentage of MenTop Earners

CATALYST VIEWPOINT

Growth for Women of Color is Stagnating

Multiple and intersecting barriers of race and gender continue to unfairly limit women of colors executive

management advancement.

u The negligible growth in women of color corporate officers seems to indicate that barriers identified

in previous Catalyst research are not weakening.41

q The concrete ceiling does not allow women of color to see themselves at the top.

q Lack of access to influential colleagues keeps women of color out of essential networks and

deprives them of new opportunities.

q Lack of mentors prevents women of color from obtaining the advice, connections, and

encouragement necessary to advance.

q Lack of role models discourages women of colors ambitions.

q Lack of high-visibility assignments prevents women of color from demonstrating their many

talents, and being recognized for them.

u There is a strong business incentive to hire, develop, and promote women of color.

q As customers, employees, and suppliers increasingly come from different parts of the world,

women of color who reflect the new demographics will have a significant advantage in

tapping into new markets, workforces, and supply chains.

q As birthrates decline in many parts of the world, it is imperative to take advantage of all

talented employees, not just white men.

q As global companies open offices in more countries, a diverse workforce that reflects the

local population will contribute greatly to maintaining a competitive position.


41 Catalyst, Advancing African-American Women in the Workplace: What Managers Need to Know (2004); Catalyst, Advancing Asians in theWorkplace: What Managers Need to Know (2003); Catalyst, Advancing Latinas in the Workplace: What Managers Need to Know (2003).

WOMEN CORPORATE OFFICERS AND FORTUNE 500 RANK

The Fortune 500 list ranks companies by revenues. The data for this Census showed no clear relationship

between Fortune 500 rank and percentage of women corporate officers.

Table 8: Percentage of Women in Corporate Officer Positions, by Fortune 500 Rank, 2005

Further, no clear relationship was found between Fortune 500 rank and share of women top earners, or

women in line or staff positions.


CHAPTER 4: WOMEN CORPORATE OFFICERSDOESFORTUNE 500 RANK OR INDUSTRY MATTER?

KEY FINDINGS

u Fortune 500 rank was positively related to the percentage of women with clout titles.

u Women had greater access to corporate officer positions in industries in which women were 49

percent or more of the total workforce (finance, insurance, real estate, retail trade, and services).

u The retail trade industry had the highest percentage of women top earners and women in clout

positions.

28.0

20.8

19.1

21.8

19.0

21.8

F1-100

F101-200

F201-300

F301-400

F401-500

F500 Average

Average NumberCorporate Officers

4.9

3.3

2.9

3.7

3.0

3.6

Average Number WomenCorporate Officers

17.5%

15.7%

15.3%

17.1%

15.9%

16.4%

Average PercentageWomen Corporate Officers


Table 9: Percentage of Women in Top Earner, Line, and Staff Positions, by Fortune 500 Rank, 2005

25

Top Earners

Total Top Earners Number of Women Percentage of Positions Heldby Women

F1-100 453 28 6.2%

F101-200 461 28 6.1%

F201-300 447 33 7.4%

F301-400 455 27 5.9%

F401-500 434 29 6.7%

Total 2,250 145

F500 Average 6.4%

Line

Total Positions Number of Women Percentage of Positions Heldby Women

F1-100 1,352 151 11.2%

F101-200 836 70 8.4%

F201-300 775 73 9.4%

F301-400 1,021 129 12.6%

F401-500 860 90 10.5%

Total 4,844 513

F500 Average 10.6%

Staff

Total Positions Number of Women Percentage of Positions Heldby Women

F1-100 1,452 339 23.3%

F101-200 1,240 256 20.6%

F201-300 1,135 219 19.3%

F301-400 1,163 244 21.0%

F401-500 1,039 212 20.4%

Total 6,029 1,270

F500 Average 21.1%

However, Fortune 500 rank was positively related to the percentage of women in clout title positions:

Compared with the lowest ranked companies, higher-ranked companies had higher percentages of women

in clout positions. This was mainly a result of Fortune 100 companies having relatively large percentages

of women in Executive Vice President positions.

Table 10: Percentage of Women in Clout Positions, by Fortune 500 Rank, 2005

INDUSTRY

The data showed large differences in the numbers of women in top leadership positions in different

industries. Industries in which women were 49 percent or more of the workforce had higher-than-average

shares of corporate officer positions held by women.42 In the FIRE,43 retail trade, and services44 industries,

women accounted for 55 percent, 49 percent, and 61 percent of the total labor force, respectively,45 and

held 17.6, 19.9, and 19.3 percent of the corporate officer positions, respectively.

Table 11: Percentage of Corporate Officer Positions Held by Women, by Industry, 2005


571

521

490

435

366

2,383

F1-100

F101-200

F201-300

F301-400

F401-500

Total

F500 Average

Total Positions

70

47

45

34

28

224

Number of Women

12.3%

9.2%

9.2%

7.8%

7.7%

9.4%

Percentage of PositionsHeld by Women

Construction

FIRE

Manufacturing

Mining

Retail Trade

Services

Transportation and Utilities

Wholesale Trade

F500 Average/Industry Average

Industry

13.6%

17.6%

12.9%

9.6%

19.9%

19.3%

15.7%

16.2%

16.4%

Percentage WomenCorporate Officers

9.6%

55.3%

30.0%

12.8%

48.7%

60.5%

23.5%

28.7%

33.6%

Percent Women Employedin Industry

42 Women were at least 49 percent of the workforce in both 2000 and 2005 for these industries. Bureau of Labor Statistics, Current Population Survey,unpublished data (2001 and 2006).

43 FIRE stands for financial services, insurance, and real estate.44 Services include professional and business services, education and health services, leisure and hospitality, and other services (e.g., salons, dry

cleaners, funeral homes).45 Bureau of Labor Statistics, Current Population Survey, unpublished data (2006).

Women held a higher-than-average percentage of clout positions in the FIRE and retail trade industries.46

Table 12: Percentage of Women in Clout Positions, by Industry, 2005

The retail trade industry had the largest percentage of top earners who were women, followed by

wholesale trade. Women had the highest share of line positions in services, followed by retail trade and

then FIRE. Women were overrepresented in staff positions in all industries except mining.

Table 13: Percentage of Women Top Earners, Line, and Staff Positions, by Industry, 2005


Construction

FIRE

Manufacturing

Mining

Retail Trade

Services


Wholesale Trade


Industry

2.3%

12.3%

3.7%

5.0%

13.6%

8.1%

8.0%

7.7%

9.4%

Percentage Clout TitlesHeld by Women

9.6%

55.3%

30.0%

12.8%

48.7%

60.5%

23.5%

28.7%

33.6%

Percent Women Employedin Industry

Construction

FIRE

Manufacturing

Mining

Retail Trade

Services


Wholesale Trade


Industry

3.4%

6.4%

4.4%

2.7%

8.8%

6.8%

6.7%

8.4%

6.4%

Top Earners

6.7%

11.0%

6.8%

1.7%

15.4%

16.0%

8.9%

8.1%

10.6%

Line

18.5%

22.8%

17.9%

14.2%

24.4%

22.0%

20.2%

22.8%

21.1%

Staff

9.6%

55.3%

30.0%

12.8%

48.7%

60.5%

23.5%

28.7%

33.6%

Percent WomenEmployed in Industry

46 These industry advantages were not an artifact of company rank. In a regression with the percentage of clout titles held by women as the dependentvariable, there were significantly more clout titles held by women in the FIRE and retail trade industries even when Fortune rank was included inthe regression.

CATALYST VIEWPOINT

For Women in Executive Leadership, Fortune 500 Industry Matters

u Catalyst research has found that women managers in male-dominated industries suffer the effects

of gender stereotyping more than women managers in industries with more equitable distributions

of women and men employees.

q Men who report to a woman in male-dominated industries are more likely to perceive

women as inferior problem-solvers than men with women managers in other industries.47

uThe organizational culture of some industries may also present extra challenges to women in those

industries.

q Historical norms, expectations, and practices create and sustain barriers that prevent women

from advancing.

uCompanies in industries in which women represent at least 49 percent of the workforce (e.g., retail

trade, FIRE, and services) have successfully mirrored their customer bases.

q These companies have significant numbers of women employees, women managers, and

women corporate officers.

q As more women become middle managers and professionals, more women are making

business purchasing decisions; these decisions are often driven by diversity considerations

(e.g., corporate general counsel offices insisting that their outside law firms be more diverse).

uTwo primary motivations have led these companies to take serious actions to include women in their

leadership ranks.

q They want to address existing markets more effectively by better reflecting the population of

consumers.

q They want to expand into new markets with new demographics, and they need a more

diverse management team to understand and respond to these new markets.

u In industries in which women are not traditional employees (e.g., mining, construction,

manufacturing), forward-thinking companies have recognized that sustainability and being an

employer of choice depends upon diversity.

q Catalyst Award winners, such as BP p.l.c. and Shell, have been recognized for their diversity

initiatives.


47 Catalyst, Women Take Care, Men Take Charge: Stereotyping of U.S. Business Leaders Exposed (2005).

WOMEN CORPORATE OFFICERS AT SUSTAINED-COMMITMENT COMPANIES

In stark contrast to a number of sobering statistics presented in this report, this chapter highlights the

achievements of a select number of Fortune 500 companies that have made solid and consistent progress

in placing women in corporate officer positions. These companies have maintained 25 percent or more

women corporate officers across multiple Catalyst Censuses since 1995. These sustained-commitment

companies have recognized and harnessed the power of diversity by including women in their top

corporate ranks. Moreover, they have implemented policies and procedures to ensure that women are well

represented at all levels of the corporation.

The sustained-commitment companies identified by Catalyst are:

25 percent or more women corporate officers for all seven Catalyst Censuses, 1995-2005

Avon Products, Inc.

Merck & Co., Inc.

Nordstrom, Inc.

PacifiCare Health Systems Inc.

Pitney Bowes Inc.

The Gap Inc.

25 percent or more women corporate officers for six of seven Catalyst Censuses, 1995-2005

Kelly Services, Inc.


KEY FINDINGS

u Women corporate officers used a variety of strategies to achieve success within their companies,

including: being committed to building the corporate business; developing effective relationships with

coworkers; working well on teams; and learning from others within the corporation.

uMentors were a key factor in women corporate officers success.

u Women corporate officers dealt constructively with barriers and failures.

u There are several steps that sustained-commitment companies have taken, and that other companies

can take, to diversify corporate leadership positions.

CHAPTER 5: VOICES OF EXPERIENCEINTERVIEWS WITHWOMEN CORPORATE OFFICERS

LISTENING TO WOMEN CORPORATE OFFICERS

To understand the experiences of women corporate officers working for these sustained-commitment

companies, and to identify the steps these companies have taken to become leaders in this area, Catalyst

conducted in-depth interviews with ten women corporate officers about their experiences in corporate

leadership. This qualitative research had two objectives: First, we asked each woman corporate officer

about her career advancement and her experiences working for various organizations; and second, we

asked these women why their companies had demonstrated such a strong commitment to diversity in

corporate leadership and how this commitment was executed. Interviewing proved an excellent

methodology for these purposes because it provides access to the context of peoples behavior and

thereby provides a way for researchers to understand the meaning of that behavior.48

METHODOLOGY

From December, 2005, to January, 2006, Catalyst conducted in-depth interviews with ten women corporate

officers from five of the seven sustained-commitment companies named above. The interviews were

conducted over the phone and averaged 45 minutes in length. The companies from which the officers were

drawn represented a range of industries and company sizes, and the women interviewed brought diverse

and varied backgrounds and experiences to their companies.49

BECOMING SUCCESSFUL

The women corporate officers we interviewed, by definition, had achieved success at work. To better

understand how they became successful, Catalyst asked these women what they had done in their careers

to advance to officer positions while others had not. Responses were mixed, but one-half of the women

emphasized attachment to the company and a focus on the business. As one woman put it:

I really look at what drives the business, and contribute to what drives the growth of the

business.

Another woman concurred, stating:

Im very committed to achieving what you set out to achieve. And if you make a commitment

to the organizationto your peoplethat is truly a commitment. So that sort of focus and

resolve to make important things happen in an organization, I think thats one thing [that has

helped me advance when others have not].


48 Irving Seidman, Interviewing as Qualitative Research: A Guide for Researchers in Education and the Social Sciences (New York: Teachers CollegePress, 1991): p. 4.

49 Catalyst guaranteed confidentiality to the corporate officers interviewed for this research. Because of the relatively small number of women in thesample, Catalyst does not disclose identifying characteristics in relation to the women or quotations cited here.

In addition to focusing on the business at hand, almost one-half of the women corporate officers also

mentioned their ability to assemble effective teams and build solid relationships as key to their

advancement. One woman noted:

Ive been able to work effectively through people, to understand other perspectives, to be able

to build consensus, or at least [get people to] buy in to the right decisions, and then, over time,

to be able to manage people and lead an organization and get them committed to a vision.

Likewise, another woman stated:

Youre only as good as the people who work with you. So, I feel like my success is not only my

own ability, but largely the ability of the people Ive developed and created and nurtured around

me to make a great organizationnot just what I can personally do, but what we can do

together.

A few women corporate officers also named the ability to look and listen as another effective tool used

in their advancement. According to one woman:

I've always been a student, always recognizing that you can learn something from everyone

good things or not-so-good things. [Its] really just tapping into people who have succeeded and

have gotten good results and listening to how theyve done it.

Other strategies women corporate officers used to advance their careers included:

u building trust and demonstrating integrity;

u going above and beyond the assigned roles and responsibilities to develop new programs or make

recommendations for change or improvement; and

u dealing with barriers constructively.

WORK-LIFE QUALITY

We also asked the women corporate officers what choices, trade-offs, and changes they made to achieve

their success. In response, the women most often stated that they proved that work was a priority for

them, usually as it related to their personal lives. One woman stated:

I dont necessarily have the most balanced life. I wont say my identity is my work, but its

certainly a large part of what I do.

Several of the women emphasized this view and stated that in order to prove they were fully committed

to their jobs and their companies, they: sacrificed time with their families, and time for themselves; chose

not to have children; or immediately returned to work after the birth of a child. One woman mentioned

that she moved frequently, sometimes simply to retain her position, and at other times to advance her

career.2005 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 500 31

MENTORS AND CAREER ADVICE

When asked about career advice and discussions around career development and advancement, all of the

women corporate officers mentioned the presence of mentors who had supported them at various times

during their careers. The presence and support of these mentors was ubiquitous.

For these women, mentors were most often their current or previous supervisors, although some women

corporate officers turned to friends or colleagues for career advice. Regardless of the nature of the

relationship, it was clear that having a variety of mentors worked best for these women. As one woman

explained:

I dont have one-stop shopping ... I dont turn to the same people [for advice every time],

because I take a pulse and a calibration as to whos going to give me the most relevant

information for what I need to know, and theyre not always the same people.

As evidenced by the data, an array of mentors provided advice and critical information about corporate

norms and rules to these women. This support was critical in helping these women advance their careers.

LEVERAGING ADVERSE CIRCUMSTANCES

Catalyst also explored the barriers these women corporate officers encountered as well as failures they

experienced in their careersand the concomitant lessons that came with those experiences. The most

common theme that emerged from responses to this question was that of being passed over for

promotion. A few of the women corporate officers we interviewed named this as a failure or barrier they

had experienced. One woman told her story of this failure in the following way:

I think [one of the barriers] has been this sort of disease that a lot of companies probably

experience, where the person on the outside always looks a lot better than the people on the

inside that you know ... [My boss once] brought in [a man] at the same level as me, but then

there was a level to which I aspired to be promoted. [My boss] knew this, but he promoted the

newer person, who was completely undeserving of it And this was just not acceptable [to

me]. So, I sat down with [my boss], and I explained how this was affecting me, and I wanted

to know what I needed to do to get there. He laid out a project that he thought would be a good

one for me to take on. He said if I would accomplish that, then he would promote me. My code

word for the project was broomstick because I thought of it as bringing back the broomstick

of the Wicked Witch of the West. And thats exactly what happenedI brought back the

broomstick and I got the promotion. [The new guy] crashed and burned, and left.


For another corporate officer, her failure to be promoted was not a result of the grass is always greener

logic. Instead, she was passed over for promotion in favor of a woman from her own company. By her

account:

I was crestfallen. I was like, What did I do wrong? You know, this is such an affront to me.

Should I leave? But I had a discussion with [my boss], and at the end of the discussion I said

to him, Well youve obviously made your choice And so I have two ways to handle this

news: I can either deal with it and move on and make it work, or I can leave. And Ill decide. I

chose to stay.

What is evident from this quotationand what the women corporate officers emphasized when

discussing how to deal with barriers and failuresis that barriers must be handled in a constructive way.

The experience of a woman of color corporate attorney illustrates this point:

Ill never forget the day I went to moderate a customer dispute. I was waiting for the

attorney to return from lunch, and I was sitting there with my two clients, two white guysI was

in the middle and they were on either sideand the lawyer walked in the door and said to the

salespeople, because he knew both of them, So, I thought you were bringing your lawyer? Well,

I chose to use that to my advantage [and consequently] he never regained his equilibrium. So, I

could have sat there and said, How dare you? I am the lawyer! And what I did was, I just waved

at him. I said, They brought me. And he never could regain his composure. Well, I settled that

very nicely. You know, it was a subconscious thinghe was embarrassed the entire meeting! So

I could sit there [and] let that sap my energy and choose to be really hostile, frankly, and instead,

I just chuckled to myself and said, Go ahead and underestimate me. I just used that to my

advantage.

As evidenced by the fact that all of these women have become corporate officers, it is clear that the

hurdles these women faced were just thatbarriers faced and overcome at a specific moment in their

careers. These barriers did not preclude their rise to the top of the corporation. Instead, these women

leveraged these moments to build and refine their leadership skills.


WHAT WOMEN BRING TO THE TEAM

When asked about the ways in which their presence in leadership had affected the performance of their

companies leadership teams, some of the women corporate officers we interviewed said they were able

to use their leadership positions to influence others on the team,50 as well as to encourage the team to

address difficult issues in a pretty transparent and open way, as one corporate officer said. Some of the

corporate officers achieved these goals by being unfailingly candid and forthcoming, as one woman

declared of herself. Another said:

I think people [on the leadership team] are a little bit more open [because I am there]. I think

people want to know where they stand. People want to know how they're doing. People dont

want things to be sugarcoated, and as painful as some things may be, people respect and

appreciate honesty [Im] direct, but fair, honest, and respectful.

COMPANY PRACTICES AND GOALS: SUSTAINING COMMITMENT

A portrait of the experiences of women corporate officers at sustained-commitment companies would not

be complete without a look at the companies themselves. We asked women corporate officers about

particular acts, company policies, and practices that allowed these companies to be successful in

advancing women. Women corporate officers noted that to sustain growth of women in corporate

leadership, three basic requirements must be met.

1. Commitment across levels and time

[Advancing women] takes a serious commitment of fast-tracking, identifying high-potentials,

and you cant take it for granted You have to work hard at it, even in a company that does

have, by the numbers, a better track record It still is a serious commitment that needs to be

reviewed every year Whether its in promotions, whether its in compensation, whether its in

hiring, making sure we dont have a percent number in reality, but my theory is that it should be

even. Why? Because I think [the gender balance of the company] should reflect the population.

2. An inclusive culture that boasts women at all levels of the corporation

Its with the succession planning, looking at your early talent, your key talent, and moving them

through the grade levels to ensure you have women in leadership positions. So its an ongoing

process, and one that starts with women at lower levels and looks at how to bring them up into

higher levels, as well as looking for women outside the organization whom you can recruit.


50 Catalyst research has shown that both women and men in corporations view men leaders as better at influencing upward. Interestingly, womencorporate officers here named influential communication as their primary strength with respect to the leadership team. While influencing othersdiffers slightly from influencing upward in that the former focuses primarily on peers, the fact that the women sampled here viewed their influenceas notable seems contrary to the perceptions of many women and men in corporate leadership. See Catalyst, Women Take Care, Men TakeCharge: Stereotyping of U.S. Business Leaders Exposed (2005).

3. Measurement and accountability mechanisms that allow companies to track womens

progress and that hold managers accountable for diversity goals

[It truly is] part of the DNA [Our CEO will] say, Where are your women on the leadership

team? [Once] in a foreign country, the comment was, We dont have to track that under the

law here. And [the CEOs] response was, I didnt ask you what the law requires. Im telling you

what [this company] expects.

CATALYST VIEWPOINT

Sustained-Commitment Companies Allow Women to Succeed

Sustained-commitment companies realize that diverse leadership is not just nice, but necessary for a

company to succeed and be sustainable.

u Most of these companies have diversity programs in place that reflect the major categories of the

Catalyst Award criteria:

q Business Rationale

q Senior-Level Leadership

q Accountability

qCommunication of Initiative

q Replicability

qOriginality

q Target Population and Measurable Results

u Catalyst Award winners realize culture change and results because they work at it over many years.

q They set stretch diversity and inclusion objectives consistent with their strategic goals.

q They monitor their diversity and inclusion numbers with the same rigor and serious

accountability as they use when monitoring their revenue, profit, and market-share numbers.

u Sustainable-commitment companies operate under a true meritocracy.

q These companies remove barriers preventing womens advancement.

qWhen barriers exist, women and others waste time, energy, and resources trying to remove

the barriers, effort that could be spent more productively benefiting the company.

qWhen barriers exist, women are in effect removed from the pool of talent from which

companies can choose their leadership.


The numbers in the 2005 Census of Corporate Officers and Top Earners of the Fortune 500 are bleak.

Although women did increase their share of corporate officer and top earner positions relative to 2002,

the increases were minimal and the decline in growth from previous Censuses was drastic. This decline is

surprising, considering that women accounted for 46.4 percent of the labor force, 34.8 percent of all

M.B.A. recipients, and 50.6 percent of the managerial and professional workforce.51 In addition, a large

number of companies have instituted diversity and inclusion policies that aim to increase the retention and

advancement of women.

Figure 14: The Catalyst Pyramid: U.S. Women in Business

This Census demonstrates that there is a considerable amount of work that needs to be done before

Fortune 500 companies become meritocracies. Few companies have been able to remove the barriers that

prevent women and other diverse employees from achieving the same successes as white men. Across all

Fortune 500 quintiles and industries, companies that harbor barriers to the retention and promotion of

women will miss opportunities that womens expertise, skills, and knowledge could bring to decision-

making processes. These lost opportunities will certainly lead to competitive disadvantages in the global

marketplace.


CHAPTER 6: CONCLUSIONS AND CALL TO ACTION

46.4%

50.6%

16.4%

14.7%

9.4%

6.4%

1.6%F500 CEOs

F500 top earners

F500 highest titles

F500 board seats

F500 corporate officers

Management, professional, and related occupations

U.S. labor force

Sources: Current Population Survey, Annual Averages, 2005; Catalyst, 2005 Catalyst Census of Women Board Directors of the Fortune 500

Catalyst, 2005 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 500

Sources: Current Population Survey, Annual Averages, 2005; Catalyst, 2005 Catalyst Census of Women Board Directors of the Fortune 500

Catalyst, 2005 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 500

TheCatalyst Pyram

id: U.S.Wom

enin

Business

Sources: Current Population Survey, Annual Averages, 2006;Catalyst, 2005 Catalyst Census of Women Board Directors of the Fortune 500;Catalyst, 2005 Catalyst Census of Women Corporate Officers and Top Earners of the

Fortune 500

51 Bureau of Labor Statistics, Current Population Survey, Annual Averages (2006) and The Association to Advance Collegiate Schools of Business(AACSB), Overview of U.S. Business Schools, 2004-2005 (2006).

CALL TO ACTION

Gender diversity in the workplace is supported by a compelling business case that argues for the health

and sustainability of the organization. Certainly a 35.1 percent higher return on equity (ROE) would be very

attractive to any CEO.52 CEOs and senior leadership know they can create tremendous change in their

organizations by modeling and demanding desired behaviors. Its up to CEOs and senior leadership to take

the next steps.

1. DEFINE THE BUSINESS CASE FOR DIVERSITY AND INCLUSION

In the United States, demographics in the marketplace and employee base are changing dramatically.

In order to be successful, companies need to be an employer of choice. Companies that can attract,

retain, and promote diverse employees will expand the talent pool available to them at all levels. A

larger talent pool will mean a greater likelihood of success in the marketplace.

At the same time, new customers, employees, and suppliers now come from all parts of the world,

and it is important that leadership at companies with global presence reflect this reality. Breaking into

new markets, understanding different employee cultures, and negotiating with non-U.S. suppliers

often requires a deep knowledge of country-specific work styles, expectations, and practices.A diverse

leadership team is more likely to have this knowledge, and, therefore, success, than a homogeneous

team.

2. DEMAND DIVERSITY

Organizational change will only come when it is clear that CEOs and senior leadership believe

diversity is integral to the achievement of key business goals. CEOs must demand diversity and lead

with actions that demonstrate the business importance of diversity. A prime example of leading with

actions is for CEOs to demand and support diverse slates, diverse selection teams, and diverse

outcomes when executive positions are filled. Although Boards must approve all corporate officers,

we know that they generally support the candidates CEOs recommend. CEOs who recommend diverse

candidates to their Boards demonstrate their commitment to diverse leadership teams, and the rest

of the organization will take note.

3. BREAK THROUGH STEREOTYPES

Catalyst research shows that stereotyping of women is a key barrier to womens advancement. In

particular, men managers perceive themselves as much better problem-solvers than women

managers. However, meta-analysis of more than 40 studies on leadership shows there are few

differences between women and men in workplace behavior and style.53 Clearly, actions, results, and

merit should determine advance

Documents

2005 Census Fortune 500 Women Corporate Officers