S&P Global Quantamental Research – August 2023
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Theme: Social Equity
Published: August 10, 2023
Women held 21.9% of all board and C-suite positions in companies in the Russell 3000 Index at year-end 2021, up from 9.5% in 2010.
Extrapolating at current trends, companies in the Russell 3000 would reach gender parity in senior leadership roles between 2030 and 2037.
Most of the progress towards gender parity comes from the increasing number of women taking seats on company boards, while C-suite parity remains elusive.
Modeled values are within 0.4% of observed values one year after estimation, on average. This close agreement engenders confidence in the model forecasts.
Jennifer Laidlaw | S&P Global Sustainable1, Senior Writer
Daniel J. Sandberg, PhD, CFA | S&P Global Market Intelligence, Quantamental Research Managing Director
While diversity in leadership has received increasing attention, most data show slow, incremental improvements at best. Yet in an otherwise bleak landscape, a bright spot has emerged: An analysis of 86,000 executives from 7,300 U.S. firms over 12 years found that women could reach parity in senior leadership positions between 2030 and 2037, among companies in the Russell 3000.
Equality advocates have pushed for diversity on company boards and management teams, and in some parts of the world, policy and regulatory change have taken hold. Despite such drivers, recent research paints a picture of slow, incremental improvements. The World Economic Forum’s (WEF) latest Global Gender Gap Report estimates that gender parity will take more than 100 years at the current rate of progress. A recent analysis by S&P Global Sustainable1 showed that only 4.4% of 5,400 companies assessed in the S&P Global Corporate Sustainability Assessment (CSA) had a woman in the role of CEO.
The report herein offers an encouraging finding in an otherwise bleak landscape. In this comprehensive study of executives and board members for companies in the Russell 3000 index since 2010, there is evidence of exponential growth in the women’s representation rate (, defined as the percentage of women relative to the total). If the exponential growth observed over the last 11 years were to continue, women would hold half of senior leadership positions in these U.S. companies by 2030, implying an accelerated timeline compared to WEF’s global projections.
To achieve this estimate, the existing data on women’s representation rate in the study universe was fit to an exponential growth curve. The model can be extrapolated until the women’s representation rate reaches 50% (that is, parity with men). A more conservative model, whereby the rate of growth slows as representation approaches 50%, forecasts parity by 2037. This more conservative assumption estimates that exponential growth will continue in the near term but abate as women’s representation rate reaches an inflection point. In simple terms, companies that have been concentrating on achieving gender equality may deemphasize parity objectives as they realize progress.
Reality has closely followed model estimates, except during the COVID-19 lockdown in 2020. The error in the model forecasts is 0.4% on average over the last four years (2019-2022). The strong agreement of model projections with reality engenders confidence in the model. A notable exception was during the COVID-19 pandemic, when the actual representation of women in leadership positions grew by only 1.7%, versus the model expected growth of 2.5%. This data point is confirmatory of other observations that women’s careers were generally hit harder, by COVID-19 compared to their male counterparts.
According to the World Economic Forum’s (WEF) 2023 Global Gender Gap Report, North America is the second most advanced region in terms of closing the gender gap, just behind Europe. The region also leads on closing the gender gap in the report’s economic participation index, where both the U.S. and Canada improved their scores. Parity in wage equality (for similar work) and estimated earned income had also increased in both countries, WEF found.
Policy actions and regulation may also accelerate the representation of women in overall leadership positions at U.S. companies. The Biden-Harris administration announced a national strategy on gender equity and equality in 2021. The strategy aims to achieve gender equality across society by, for example, promoting women’s economic opportunities and access to well-paying jobs and leadership roles. The administration has said it is also taking steps to address equal pay in all states and further support access to childcare for specific industries. Further, in 2020, the U.S. Securities and Exchange Commission (SEC) mandated, that publicly traded companies disclose certain details about their human capital resources that are material to their business, such as gender diversity. The SEC is scheduled to enhance human capital disclosure requirements in 2023, which could put pressure on companies to increase focus on diversity and provide additional transparency. The regulator has also made corporate board diversity an agenda item for 2023, with a potential rule that would enhance disclosures about the diversity of board members and nominees.
Despite notable progress for women in U.S. leadership, the data also show that gender parity in the C-suite remains elusive. The same extrapolation methodology used in section 2 suggests collective C-suite parity may not occur until mid-21st century and parity at the highest levels in CEO and CFO positions could take even longer. The fact that parity in the C-suite may not be achieved before mid-century begs the question of whether companies, exchanges, regulators, and governments should be taking further action.
According to the S&P Global Corporate Sustainability Assessment (CSA), Europe is the region with the highest percentage of women in CEO roles, at 7.9%, reflecting legislative measures to ensure women’s participation in company decision-making. For example, France passed a law in 2011 mandating a 40% representation of women on corporate boards. The percentage of women on the boards of France’s biggest publicly traded companies soared to 46% by 2021, up from 15% when the law was passed ten years prior. Norway was the first country in the world to introduce binding gender quotas for corporate boards, while the U.K.’s voluntary approach to gender balance has produced encouraging results. Those measures have yet to filter through to the number of women in executive positions, suggesting that more is needed to reach parity in the C-suite. In North America, the representation of women CEOs is slightly less than that of Europe at 7%, according to S&P Global’s CSA data. While ahead of Asia Pacific, Africa and Latin America, companies in the U.S. and Europe still have far to go before women have parity.
Research has shown that a more diverse workforce can make a company more profitable. Diversity could also have an impact on the long-term value of the firm. A study by S&P Global published in 2019 showed that firms with a woman in the position of CFO were more profitable and generated excess profits of $1.8 trillion. Companies with a woman in the position of CEO or CFO produced superior stock price performance compared to the market average, while firms with more women on their boards were more profitable than firms with low gender diversity.
Women could achieve representation parity with men across senior leadership roles in the U.S. in less than a decade. While that possibility is encouraging, recognizing that parity in the C-suite may not occur until mid-century provides an opportunity for firms to give further support for women’s participation in the workplace. Companies can develop talent earlier in women’s careers and can implement strategies to ensure a steady flow of women in the talent pipeline. Data show such strategies make good business sense and have long-term benefits.
The S&P Global Professionals dataset was the source for executive data. The dataset includes board and company affiliations, executive biographies, standardized job functions, titles, education, and compensation for more than 4.5 million professionals going back to 1992. Data are primarily sourced from Proxy Filings DEF-14A and amendments to 10-K filings, as well as other regulatory filings and press releases.
The S&P Global Corporate Sustainability Assessment (CSA) data is sourced from both publicly available information and company surveys that include over 1,000 datapoints and approximately 100 questions. Companies are scored on their responses and the scores are used as the basis for inclusion in the Dow Jones Sustainability Indices.
This study includes more than 86,000 executives from 7,300 firms over 12 years. At each year, all Russell 3000 Index constituent firms as of December 31 with relevant executive information were included. Exhibit 2 contains the count of distinct individuals for each role over the entire analysis period. Except where otherwise noted, analyses were run on the executives holding the positions below.
Gender determinations were made by three separate methods.
After the 3 steps were completed for each executive in the study, the gender attribute classifications were programmatically compared for agreement, ignoring ambiguous results. Ambiguous records were resolved by a web search and manual determination.
This work presents models of WRR extracted to parity. Models can be grouped into two classes by functional form: second-order polynomial and sigmoidal. Both models are non-linear. Non-linear models were selected because the growth rate of WRR increases over the study period, indicating a positive second derivative for WRR in the present period.
The second-order polynomial captures the increasing growth rate of WRR over the training period, but assumes the growth rate continues to increase in the extrapolation period. Under this assumption, the largest growth in WRR occurs just before parity. Extrapolation beyond parity indicates all executive positions will be held by women as early as 2040. While this is mathematically possible, it is practically implausible.
The sigmoidal model assumes the second derivative moves in a pendulum fashion. Specifically, the second derivative will reach a maximum, retracing a path to 0, and turn negative at the so-called inflection point. When constructing a sigmoidal time-series model without observing the inflection point, an inflection point must be assumed. In this work, the inflection point was assumed at the time when the polynomial model is halfway to parity. For example, if WRR starts at 10% then a WRR of 30% is halfway to parity. Generally,
Each model was trained on the observed WRR starting in 2010. For the model labeled 20x, data up to year-end 20x was included; where x .
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 Throughout this work, the term ‘parity’ refers to ‘representation equity’ and is defined as an equal number of women and men filling the available positions. To assess parity defined otherwise would require further data and analysis.
 World Economic Forum, 2023. “Global Gender Gap Report 2023.” https://www.weforum.org/reports/global-gender-gap-report-2023/
 S&P Global Sustainable1, 2023. “The Path to Gender Parity.” https://www.spglobal.com/esg/insights/featured/special-editorial/the-path-to-gender-parity
 See the S&P Global Sustainable1 ESG Raw Data dataset for additional detail, https://www.spglobal.com/esg/solutions/esg-score-raw-data
 The Russell 3000 is a stock index comprised of the largest 3,000 U.S. companies and represents approximately 98% of the U.S. equity market by market capitalization.
 The study universe was senior leadership positions in Russell 3000 firms from 2010 to 2022. See appendix for additional detail.
 Pan American Health Organization, 2022. “COVID-19 Pandemic Disproportionately Affected Women in the Americas.” https://www.paho.org/en/news/8-3-2022-covid-19-pandemic-disproportionately-affected-women-americas
 McKinsey & Company, 2020. “Covid-19 and gender equality: Countering the regressive effects.” https://www.mckinsey.com/featured-insights/future-of-work/covid-19-and-gender-equality-countering-the-regressive-effects
 World Economic Forum, 2023. “Global Gender Gap Report 2023.” https://www3.weforum.org/docs/WEF
 The White House, 2021. “The White House: Fact Sheet: National Strategy on Gender Equity and Equality.” https://www.whitehouse.gov/briefing-room/statements-releases/2021/10/22/fact-sheet-national-strategy-on-gender-equity-and-equality/
 The White House, 2021. “The White House: National Strategy on Gender Equity and Equality.” https://www.whitehouse.gov/wp-content/uploads/2021/10/National-Strategy-on-Gender-Equity-and-Equality.pdf
 For expanded discussion, see Whieldon, E., 2021. “Top US financial regulator faces big questions in move to mandate ESG disclosures.” S&P Global, https://www.spglobal.com/esg/insights/top-us-financial-regulator-faces-big-questions-in-move-to-mandate-esg-disclosures
 Office of Information and Regulatory Affairs, 2023. “Human Capital Management Disclosure.” https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202304&RIN=3235-AM88
 Office of Information and Regulatory Affairs, 2023. “Corporate Board Diversity.” https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202304&RIN=3235-AL91
 See the CSA factsheet for additional detail, https://portal.csa.spglobal.com/survey/documents/CSA_CorporateSustainabilityAssessment_factsheet.pdf
 Légifrance, 2011. “Relative à la représentation équilibrée des femmes et des hommes au sein des conseils d'administration et de surveillance et à l'égalité professionnelle.” https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000023487662
 French Senat, 2021. “Parité en entreprise : pour de nouvelles avancées, dix ans après la loi Copé-Zimmermann.” https://www.senat.fr/rap/r20-757/r20-7572.html
 European Foundation for the Improvement of Living and Working Conditions, 2023. “Government proposes gender quotas on company boards.” https://www.eurofound.europa.eu/publications/article/2003/government-proposes-gender-quotas-on-company-boards.
 FTSE Women Leaders Review, 2023. ”Achieving Gender Balance.” https://ftsewomenleaders.com/wp-content/uploads/2023/03/ftse-women-leaders-review-report-2022-v2.pdf
 S&P Global Sustainable1, 2023. “The Path to Gender Parity.” https://www.spglobal.com/esg/insights/featured/special-editorial/the-path-to-gender-parity
 Sandberg, D.J., 2019. “#ChangePays: There Were More Male CEOs Named John, than Female CEOs.” S&P Global Quantamental Research. https://www.spglobal.com/marketintelligence/en/news-insights/research/changepays-there-were-more-male-ceos-named-john-than-female-ceos
 For discussion on the use of ‘gender’ rather than ‘sex’ within this work, see Sandberg, D.J., 2019. “#ChangePays: There Were More Male CEOs Named John, than Female CEOs.” S&P Global Quantamental Research. https://www.spglobal.com/marketintelligence/en/news-insights/research/changepays-there-were-more-male-ceos-named-john-than-female-ceos
 Parts of section 5.1. ‘Functional Form and Model Training’, were copied verbatim or paraphrased from earlier research. See Sandberg, D.J., 2021. “Glass Floors and Ceilings: Why Closing the Median Wage Gap Isn’t Fair.” S&P Global Quantamental Research. https://www.spglobal.com/marketintelligence/en/news-insights/research/glass-floors-and-ceilings-why-closing-the-median-wage-gap-isnt-fair