It’s been a week now, and I’ve calmed down somewhat, enough to be able to write on this topic with some coherence and without burning the place down with my ire.
Would Having More Women On Boards Lead To Less Excessive Salaries?
Yes, I believe there is incredible greed in Corporate America. Too many Senior Executives earn obscene salaries and I am frequently disgusted when they get shockingly huge golden parachutes, especially when they have demonstrated obvious incompetence or mismanagement. This is very wrong and the situation needs to be corrected, however, the cure is not to hire more women because they are paid less and ask for fewer raises.
I can understand the thinking that having more women in positions of power would help bring about a cultural change. But we have been looking to have that inequality addressed since the 90’s and the progress has been slow, disappointingly slow. For a slew of reasons. I do not believe it is due to a lack of a large enough pool of talent.
I find the statement that “we would need more women with MBA’s to achieve this” insulting.
Harvard Business School reports 36% of women enrolled in MBA for 2012, increasing to 39 % for 2013, with 39% of them in Finance. Catalyst’s report of 36.6 % of 2009/10 MBA’s earned by women is consistent. If there are almost 40% of women enrolled and achieving their MBA’s, this should easily translate to a proportional 40% representation on boards. But it doesn’t. So there is something else going on.
For one thing, the equality that women have been seeking since the 60’s (actually since post WWII when many were forced back into traditional roles) is not even close to being realized.
For example, a recent Catalyst study found that:
– Overall 60% of women started on the post-MBA career ladder at the lowest of rungs, entry-level positions. For men, that number was 46%.
– Men also had higher starting salaries than women—even after taking all the same factors into account. Overall, men had a pay premium in their first post-MBA jobs of $4,600.
And women never catch up.
– Even among men and women who started in entry-level positions and were otherwise identical in all ways that matter (received their MBAs in the same year, had the same amount of experience), men still outpaced women in terms of promotions and pay. http://www.businessweek.com/bschools/blogs/mba_admissions/archives/2010/03/tktktk_1.html
The number of MBA graduates has increased, it In 1960, there were 5,000 MBA graduates and 100,000 by the year 2000. http://thegrindstone.com/strategy/get-real-life-experience-beats-a-fancy-education-for-business-school-applicants-870/
As a result, MBA’s are not the guarantee of employment/corporate success that they once were. Only 17.6% of graduates were projected to earn a starting salary of more than $100,000 and only 4.1% more than $150,000. At the top schools, 67.4% made more than $100,000 and 21.3% more than $150,000. http://www.businessweek.com/bschools/content/sep2009/bs20090928_592028_page_2.htm
MBA’s are not the silver bullet to ensure more women make it into the “C” suite. And achieving reasonable compensation for Senior Executives of Corporations Management is a responsibility for society as a whole, not women alone. It’s like saying “It’s okay to be greedy if your Mom’s not there to tell you it’s wrong!”
I suggest that making the hiring process blind to gender is the solution to ensuring more women attain positions of corporate leadership and influence. And thus help contribute to a paradigm shift in corporate culture and responsibility.