Women being promoted through sales roles.
In the first quarter, the gender-specific composition of the executive boards and boards of directors of listed companies is analysed and summarised in relevant reports. However, reporting the incremental increase in the proportion of women does little to actually increase diversity in management bodies. We therefore looked at the promotions that took place over the last year to understand the criteria behind them (cf. Witena Market Intelligence Report 2022). In summary, expertise and experience were decisive factors, but gender was not. This finding is in line with our experience of executive searches.
While women accounted for 24% of the new members of the boards of directors of listed Swiss companies, only two of the 17 candidates elected to the highest office of chairperson were female. We see a similar picture on executive boards, where 33% of the newcomers are women – but with only one woman among the 17 new CEOs. Looking at the career path of the new CEOs, it becomes clear that most of them had previous P&L responsibility and therefore bring relevant expertise in market development. Their career path usually extends from sales to management of a strategic unit (business unit or division) to CEO. In turn, chairpersons are mostly former CEOs who have experience of overall responsibility and are therefore effective partners for the CEO at operational level.
It should also be noted that the increasing proportion of women in management bodies in recent years is mainly due to promotion to the executive board from staff positions, which are predominantly held by women. In order to achieve real, performance-enhancing diversity, however, we need a significant increase in the proportion of female managers with P&L responsibility. This is the only way to realise the potential for nominating more women as CEOs and, in a second step, to boards of directors.
The much-cited argument that companies would prevent women’s career progression may be true in individual cases, but is somewhat simplistic. Our executive search practice with over 100 searches per year paints a different picture: Most of our clients would prefer a woman with similar qualifications in staff positions or line functions with P&L responsibility. However, there is often a lack of potential when it comes to qualified female candidates. This phenomenon is the subject of an ongoing investigation that we are conducting (see Witena Letter dated February 2020). We also have to accept that not all women aspire to a professional career that extends beyond middle management. Furthermore, there is still significant potential for improvement when it comes to social acceptance of working women and mothers.
However, doing nothing is not an option. Instead, the development potential of young women must be recognised at an early stage and their career path must be supported from the start of their career through possible part-time employment when raising a family to major career moves. Effective linear career paths advance through sales – and not the marketing, communication or HR functions that are popular with young women. Market experience is expected at the head of strategic units with P&L responsibility, because the strategy should be derived from the market. In addition, the understanding of business mechanics begins with incoming orders or sales. In times of global competition, those who do not have an in-depth understanding of different customer needs will lose out. Leading a company transformation, which is typical for a CEO, also requires experience of an entire value chain.
The more young women are recruited for sales positions, the higher the future proportion of female CEOs.
As the largest owner-managed executive search boutique in Switzerland, we also take our responsibility seriously and guide young women on their career path and the complex issues associated with the compatibility of work and family for many years before they become relevant to our searches. We also support their employers in creating conditions that support women and families.
Here are some positive examples from our experience:
- Placement of a young mother as Chief Sales Officer of a large equipment engineering company. Limiting her travel to one week per month. Assisting the company in finding a customer care solution in overseas markets.
- Placement of a mother of two as CEO of an established FMCG company. Creation of the opportunity to work from home up to two days per week.
- Placement of a young mother with production experience as head of a business unit with a focus on sales and product management in preparation for a position as division head.
- Placement of a young mother as managing director of a financial services company, combined with relocation of her family. Supporting the company in establishing the conditions for working from home and maternity leave for her second child. Assisting her husband in finding a managerial position with an employer close to the family’s new place of residence.
Of course, it goes without saying that the potential of young men must also be recognised at an early stage. Because unlike Generation X, when it comes to their professional careers, Generations Y and Z are strongly influenced by work-life balance considerations. A willingness to assume responsibility is no longer taken for granted. Companies must take on the role of talent incubator and develop their future executives.
Hiring for Cultural Fit, Business Transformation and the associated Diversity are core issues for us. As an agile, dynamic Swiss executive search boutique with integrated leadership consulting, we want to take our share of responsibility for the successful development of companies in the digital age. As an enthusiastic and expert partner, Witena will be at your side to support you in the further development of your company.