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PACK EXPO Rewind: The Broken Rung

If companies with more women in leadership roles have greater innovation, increased productivity, higher employee satisfaction, and higher employee retention, why are there so few in the C suite?

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Keynote speakers Kweilin Ellingrud and Kelly Coyne from the Packaging & Processing Women's Leadership Network's "Financial Empowerment and Fixing the Broken Rung," continue the conversation with OEM Editor-in-Chief Stephanie Neil about the power of parity and accelerating gender equality, while also sharing research from the McKinsey Global Institute (MGI) “Women in the Workplace 2019” report.

Content has been edited for space considerations. To listen to the full podcast, click here.

Stephanie Neil: Kelly, I was really surprised at the statistic you mentioned about a survey that showed that 95% of companies have no female CEOs and here we are in 2020. Why do you think that women are still not represented in the C suite?

Kelly Coyne: That was from a study done looking at 22,000 companies globally and there are many reasons as to why women aren't moving through the ranks, up the corporate ladder into that specific C-suite position. Perhaps women aren't raising their hand for that position. We know that there's plenty of qualified women to fill C-suite positions, but what is the company doing to either attract women into that position and find the top talent or maybe from looking within the organization. What kind of development pipeline might they have built throughout to have a pool of candidates, both men and women, that would be highly qualified to take that position?

Kelly Coyne: Kweilin, you mentioned some of the research as to why some women aren't raising their hand for some of those senior level executive positions and what kind of culture might lead to it not looking attractive for some people of color, some women, and even some men as well.

Kweilin Ellingrud: One is there's only one in five people who report to a CEO. So members of a C suite who are women to begin with is a very narrow pipeline. And then within that pipeline, when you ask women and men, do you want to be a top executive? Oftentimes the answer is no because the tradeoffs, the 24/7 culture, the intensity of it is frankly not attractive. And so, how do we widen the pipeline so it's more than one in five women at that C suite level and make that role a more attractive role where you can bring your full self to work? Interestingly, when you look at women of color, it's only one in 25 women who report to the CEO. That would be black, Latina and Asian woman all added together. That pipeline is literally little droplets of water.

Stephanie Neil: And why do you think that is?

Kweilin Ellingrud: The drop off between the percentage of the C suite that are women and then the 3% of the C suite that are women of color is really challenging because the entire pipeline is skewed. And women start off at almost half of the entry level roles, women of color about 18% at that entry level, but it drops dramatically by five to 10 percentage points at every promotion level. And that's the challenging part. When you get to manager, senior manager, VP level equivalent, SVP level equivalents, and then finally get to the C suite where people are reporting directly to the CEO, by that time we've dropped off so low in representation that we really don't have a robust pipeline to pull from in terms of talent.

Stephanie Neil: Yeah, and one of the things that I really wanted to touch on is the research that McKinsey has done with leanin.org and the whole broken rung theory. Can you explain what that is?

Kweilin Ellingrud: The broken rung refers to that first promotion to manager from an entry level employee where women make up about 48% across industries, down to 38% of managers. And if you index that and have men's first promotion, if 100 men are promoted to manager, only 72 women and 58 black women are promoted to manager, and it's that differential in the promotion rate that is this broken rung we're describing, and it's such a broken rung that frankly we can't make up for that lost ground in the rest of the pipeline. That's why at the C suite, at more senior levels, we're looking at decades of that compounded. In fact, if you add up that broken rung over five years, that differential between men's promotion rate to manager versus women, generally, and then black woman, that's equal over five years to 1 million missing women in leadership positions. And compounded over time that results in the talent pipeline that we were just describing.

Stephanie Neil: That is unbelievable, that number. Kelly, I want to switch back to you in talking a little bit about investments. You noted that companies with more women leadership have greater innovation, increased productivity, higher employee satisfaction, and higher employee retention. So why is that? How is that measured?

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