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Gender diversity in the executive ranks is good for business, research shows.
Companies with the highest number of female executives outperform those with the lowest number by 26% in return on invested capital and by 16% on sales, according to Catalyst Inc., a New York-based nonprofit focused on women's advancement in business.
Despite those 2011 findings, just 26% of women view the commercial insurance industry as embracing women as leaders, according to a survey earlier this year of more than 800 insurance industry members by the Walnut Creek, California-based Insurance Industry Charitable Foundation.
In fact, just over 1% of the CEOs in the financial services and insurance industries are women, compared with 5.2% of Fortune 1000 companies, according to other research Catalyst published in October.
According to a Business Insurance survey of more than 1,700 members of the insurance industry, about half of companies say they have a diversity program and one-third of employees say their companies are more diverse today (see poster, page 24).
Perhaps one of the biggest obstacles to women's advancement is middle management, according to research presented at a Womenetics' Global Women's Initiative conference earlier this month in Chicago. Women often get “stuck” in midlevel roles because their managers view them as essential and reliable and don't want to lose them, according to the Bain & Co. research. But this is precisely the time such women should be advancing, because they have mastered their current positions and need to take on new challenges so they can expand their competencies, according to the Boston-based management consultant's survey.
Women have greater aspirations to ascend to top management than their male counterparts in the first two years of their careers, said Julie Coffman, chair of Bain's Global Women's Leadership Council, who presented the research at the Womenetics conference. But by midcareer, their aspirations wane, she said.
Bain's study, derived from a March survey of 1,009 people in a variety of positions and industries, found that 43% of women aspire to top management in their first two years on the job vs. 34% of men. But among experienced employees, just 16% of women are aiming for the top vs. men's steady 34%.
“This is not due to getting married and having kids,” Ms. Coffman said. “It had to do with whether they resonated with the ideal worker in their organization, whether their supervisors talked to them about their goals and aspirations, and whether there were people in their organizations who emulate their values.”
In other words, woman's aspirations rest on whether there were female role models in their organization's leadership.
“Front-line managers need to be aware of their role in cultivating talent,” Ms. Coffman said. Unfortunately, “whatever is happening in the conference room reinforces men's aspirations while eroding women's. We have to celebrate a variety of heroes in our organizations, people who took different pathways.”
Separate research by McKinsey & Co. also presented at the conference identified three key attributes shared by organizations that have made significant progress in achieving gender diversity: Companies with more women on the board in 2007 had more women in top leadership positions in 2011; industries that attract more women workers are more likely to have more women in top leadership positions; and the CEO demonstrates a personal interest in cultivating gender diversity through speech and actions.
Since Business Insurance introduced its Women to Watch recognition program in 2006, many honorees have risen into top leadership in this industry — such as Inga Beale, a 2006 honoree who last year was named the first female CEO of Lloyd's of London, the world's oldest insurance market that historically has been male-dominated. Some took nontraditional paths to leadership, such as Laura Greifenkamp, a 2013 honoree who became the chief financial officer at broker Gallagher Bassett Services Inc. after taking a break to help her husband establish his own business.
Other honorees who faced similar professional and personal hurdles on their roads to success now serve as role models other ambitious women in the commercial insurance industry can emulate. This year, Business Insurance received nearly 400 nominations for Women to Watch, demonstrating the field of outstanding women is growing, and that the advances made by prior years' honorees are paying dividends for those who follow in their footsteps.
Coincidentally, four organizations affiliated with the commercial insurance industry are spotlighted in the McKinsey research, which was sponsored by the U.S. Chamber of Commerce's Center for Women in Business. Of 581 companies for which this data was available, 78 were identified as best performers in gender diversity. Among the dozen companies that agreed to go under the microscope for the report were Aetna Inc., MetLife Inc., Travelers Cos. Inc. and Wells Fargo & Co.
While Aetna and MetLife were identified as “advantaged” because of the large proportion of female employees, Travelers and Wells Fargo had disadvantages that could have inhibited their diversity efforts that they were able to overcome, the report noted.
That is because these companies paid attention long ago to five elements that McKinsey found can help companies become leaders in gender diversity: hands-on leadership, including leaders who are personally invested in diversity; pervasive sponsorship, where creating opportunities for all talent is a leadership norm; stepped-up talent management that accelerates women's advancement, such as recruiting, talent development and succession planning; strong accountability supported by fact, where progress, or the lack of it, is measured, reported and discussed at all levels of the organization; and diversity leadership with clout, where a specialized function, top team or both are responsible for acknowledging and discussing diversity issues.
“Companies that committed to gender diversity more than 30 years ago are performing well on diversity today,” the report said. “Success begets success over time.”
Business Insurance's annual Women to Watch feature recognizes women who are doing outstanding work in commercial insurance, risk and benefits management, and related fields, including consulting and law.