I discovered that, at least in the US, the glass is only 5% full for women, as represented by the percentage of female CEOs of companies in the Russell 3000® Index. This figure was consistent when based both on number of companies and as a percentage of market cap. Five percent is remarkably low, given women make up 47% of the civilian labor force, of which 75% work full-time.
This year's theme for International Women's Day (March 8) is Pledge for Parity, but if these numbers are any indication, we’re far from gender parity in the corporate boardroom. Even as we strive for equality, I think it’s important to examine the reasons we may want gender parity, and what the "power" in achieving this objective may be.
Simply hiring women leaders could be counterproductive, and in fact female CEOs don’t necessarily outperform male CEOs; however, according to some academic research, a more diverse leadership team does tend to deliver better outcomes on average. So one view is that the power of parity is not necessarily in having a female leader, but rather a mix of views and backgrounds among the leadership team.
Studies have demonstrated that gender equality could be favorable for the US. According to the McKinsey Global Institute, achieving gender parity in the US could add $4.3 trillion of additional annual GDP in 2025, 19% higher than the business-as-usual scenario. Even just matching the best historical rates of improvement on gender equality in the workplace could increase annual GDP by $2.1 trillion in 2025, according to the McKinsey report.
The lack of women in CEO positions highlights the disparity in the workforce and the lack of diversity in the top role. But how does the distribution look if we segment by company size?
The data is mixed: Based on numbers, mega cap companies in the Russell Top 200® Index have the highest percentage of women CEOs, followed by the Russell 2000® Index. The Russell Midcap® Index has the lowest percentage of women CEOs based on numbers, however it’s comparable in terms of market cap. The Russell 2000 Index leads the other cap segments in terms of percentage of company market cap led by women CEOs.
I also examined the Russell 3000 Index from a sector perspective, and discovered consumer discretionary (39) and health care (28) have the highest absolute number of women CEOs. Based on percentage of companies in the sector, however, utilities and consumer staples take the lead.
Technology lags in terms of absolute number and as a percentage of companies, despite high profile CEOs like Marissa Mayer of Yahoo! and Meg Whitman of Hewlett Packard (who was preceded by another famous woman, CEO Carly Fiorina). Energy is last, with only four women CEOs out of 150 companies in the sector.
While I caution that we should not necessarily equate gender parity with better leadership, past studies have shown that gender diversity may be beneficial to corporate outcomes. With women CEOs leading only 5% of companies in the Russell 3000 Index, much progress has yet to be made. Keeping an eye on these statistics can help us measure this progress (or lack thereof), with the intent of increasing diversity at the top level of corporate America.
 Bureau of Labor Statistics, data as at December 2016.
 M. Noland, T. Moran and B. Kotschwar, Is Gender Diversity Profitable? Evidence form a Global Survey (Working Paper), February 2016.
 McKinsey Global Institute, data as at April 2016. The Power of Parity: Advancing Women's Equality in the United States.
© 2017 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt Capital Markets Limited (together, “FTSE TMX”) and (4) MTSNext Limited (“MTSNext”). All rights reserved.
FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX and MTS Next Limited. “FTSE®”, “Russell®”, “FTSE Russell®” “MTS®”, “FTSE TMX®”, “FTSE4Good®” and “ICB®” and all other trademarks and service marks used herein (whether registered or unregistered) are trade marks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, or FTSE TMX.
All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell indexes or the fitness or suitability of the indexes for any particular purpose to which they might be put.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this communication should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group index data and the use of their data to create financial products require a licence from FTSE, Russell, FTSE TMX, MTSNext and/or their respective licensors.
Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance presented prior to the index inception date is back-tested performance. Back-tested performance is not actual performance, but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched. However, back- tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations of an index may change from month to month based on revisions to the underlying economic data used in the calculation of the index.